Rich rewards often entail great risks, and exactly the same holds true with the highly volatile cryptocurrency market. The uncertainties in 2020 globally resulted in a heightened interest of masses and large institutional investors in trading cryptocurrencies, a new-age asset class. safetrading Increasing digitization, flexible regulatory framework, and supreme court lifting ban on banks coping with crypto-based companies have parked investments of more than 10 million Indians within the last year. Several major global cryptocurrency exchanges are actively scouting the Indian crypto market, which has been showing a sustained surge in daily trading volume within the last year amid a big drop in prices as numerous investors viewed value buying. Because the cryptocurrency frenzy continues, many new cryptocurrency exchanges attended up in the country that enables buying, selling, and trading by offering functionality through user-friendly applications. WazirX, India’s biggest cryptocurrency trading platform doubled its users from million to two million between January and March 2021.
What’s Driving World’s Largest Crypto Exchanges to the Indian market?
In 2019, the world’s largest cryptocurrency exchange by trade volume, Binance acquired the Indian trade platform, WazirX. Another crypto start up, Coin DCX secured investment from Seychelles-based BitMEX and San-Francisco based-giant Coinbase. The crypto and blockchain start-ups in India have attracted investment of USD99.7 million by June 15, 2021, which totaled around USD95.4 million in 2020. In the last five years, global investment in the Indian crypto market has increased by a whopping 1487%.
Despite India’s unclear policy, global investors are making huge bets on the country’s digital coin ecosystem because of variety of factors such as
• Tech-savvy Indian Population
The predominant population of 1.39 billion are young (median age between 28 and 29 years) and tech-savvy. While the older generation still prefers to invest in gold, real-estate, patents, or equities, the newer ones are embracing the high-risk cryptocurrency exchanges as they are more adaptable to them. India ranks 11th on Chainalysis’s 2020 report listing for global adoption of crypto, which shows the excitement about crypto on the list of Indian population. Nor does the less-than-friendly attitude of the government towards crypto or rumors swirling across the crypto have the ability to shake the confidence of the youth population in the digital coin market.
India offers the lowest priced internet on earth, where one gigabyte of mobile data costs around $0.26 as the global average is $8.53. So, almost half the billion users are taking advantage of affordable access to the internet, which enhances India’s potential to become one of the largest crypto economies in the world. According to SimilarWeb, the country could be the second-largest supply of web traffic to peer-to-peer bitcoin trading platform, Paxful. While the mainstream economy is still struggling from the “pandemic effect”, cryptocurrency is gaining momentum in the country because it offers the young generation a new and fast method of earning money.
The cryptocurrency craze resulted in the emergence of multiple trading platforms such as WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin, and many others. These cryptocurrency exchange platforms are highly secured, accessible across various platforms, and allow instant transactions, providing an amiable interface for crypto enthusiasts to purchase, sell, or trade digital assets limitlessly. A number of these platforms accept INR for purchases and trading fees as low as 0.1% so simple, fast, and secure platforms present a lucrative chance for both first-time investors and local traders.
WazirX is one of the leading cryptocurrency exchange platforms with over 900,000 users that delivers customers with peer-to-peer transaction capabilities. CoinSwitch Kuber provides the very best cryptocurrency exchange platform for Indians and is fantastic for beginners in addition to daily doers. Unocoin is one of the oldest cryptocurrency exchange platforms in India that take into account over a million traders through mobile applications. CoinDCX provides users with 100+ cryptocurrencies being an option to produce exchanges and even provides investors with insurance to cover losses in case there is a protection breach. So, global investors are eyeing the plethora of cryptocurrency exchange platforms in India to make the most of the emerging market.
• Mixed Government Response
The legislative bill regarding a ban against an electronic currency that would criminalize anyone engaged in possession, issuance, mining, trading, and transferring crypto assets might get enacted into law. However, Finance and Corporate Affair Minister Nirmala Sitharaman eased some investor’s concerns saying that the government has not planned to totally bar cryptocurrency use. In a statement directed at a respected English newspaper, Deccan Herald, the Finance Minister said, “From our side, we are specific that people are not shutting all options. We allows certain windows for folks to complete experiments on the blockchain, bitcoins, or cryptocurrency.” It’s evident that the government is still scrutinizing the national security risks posed by cryptocurrencies before choosing putting an entire ban.
In March 2020, the Supreme court overturned the central bank’s decision to ban financial institutions from dealing in cryptocurrencies, which prompted investors to pile in to the cryptocurrency market. Regardless of the lingering concern with ban, transaction volumes continued to swell, and user registration and money inflows at local crypto-exchange became 30-fold from a year ago. Among India’s oldest exchanges, Unocoin added 20,000 users in January and February of 2021. The total level of Zebpay daily of Feb 2021 got comparable to the quantity generated in the complete month of Feb 2020. Addressing the cryptocurrency scenario in India, the Finance Minister said in a CNBC-TV18 interview, “I can only just offer you this clue that people are not closing our minds, we are looking at ways in which experiments can happen in the digital world and cryptocurrency.”
Rather than sitting on the side-lines, investors and stakeholders want to help make the best of proliferating the digital coin ecosystem before the government introduces the ban on “private” cryptocurrency and announced sovereign digital currency.
Once considered a “Boys club” because of predominant male population engagement in the cryptocurrency market, the steadily rising quantity of women investors and traders has resulted in more gender neutrality in the new and digital type of investment methods. Earlier, women used to stick to traditional investments however now they’re becoming risk-takers and venturing in to the crypto space in India. After the apex court clarified the legality of “virtual currency”, the Indian cryptocurrency platform, CoinSwitch witnessed an exponential 1000% increase in its women users. Although women investors still make-up a tiny percentage of the crypto community, they’re putting up fierce competition in the Indian market. Women tend to save far more than their male counterparts and more savings means more diversity in investments such as high-return assets like cryptocurrencies. Also, women are more analytical and better at evaluating risks prior to making the best investment choices, so they’re more successful investors.
Increasing Mainstream Institutional Adoption of Cryptocurrencies
Uncertainty and panic aroused by SARS-Covid 19 resulted in a liquidity crisis even prior to the economic crisis set off. Many investors converted their holdings into cash to safeguard their finances, which triggered the collapsed prices of bitcoin and altcoin. But although crypto suffered an important crash, it still managed to be the very best performing asset class of the year 2020. With the increased vulnerability of the system and loss of rely upon the policies of the central bank and money in its current design, people have an increased appetite for digital currencies which triggered the rebound of cryptocurrency. As a result of stellar performance of cryptocurrency in the midst of the global financial crisis, the uptrend has strengthened curiosity about the virtual currency market in Asia and the remaining world.
Furthermore, to fuel society’s demand for convenient and reliable transaction solutions, digital payment gateways such as PayPal have shown their support towards cryptocurrencies that can enable consumers to keep, buy, or sell with virtual assets. Recently, Tesla CEO Elon Musk made an announcement of investment in the cryptocurrency market worth USD1.5 billion, and that the electric company would accept bitcoin from buyers, which resulted in an international bitcoin price jump from USD40,000 to USD48,000 within two days. Two of the biggest platforms to make payments across the world, Visa and Mastercard are also endorsing cryptocurrencies by introducing them as a moderate to produce transactions. While Visa has already made the announcement of allowing transactions with stable coins on the Ethereum blockchain, Mastercard would begin transactions with crypto sometime in 2021.
What does the near future hold for the Cryptocurrency market in India?
The Indian cryptocurrency market is not immune to the terrible crypto crashes. Despite humongous investment from global counterparts, local investors are still maintaining distance from crypto investments because of uncertainty concerning the legality of the digital coin ecosystem in India in addition to the high volatility of the market. Even though cryptocurrency market is booming since last year, Indians own significantly less than 1% of the world’s bitcoin, which creates a strategic disadvantage for the Indian economy. The Indian government is about to appoint a new panel to study the likelihood of regulating digital currencies in the country in addition to concentrate on blockchain technology and propose it for technological enhancements.
The capability of blockchain technology to provide a secure and immutable infrastructure has been realized by various industries to instill transparency in transactions. For a country with over 15 million crypto adopters, the new recommendation from the committee could hold great value to ascertain the ongoing future of cryptocurrency in India. However, the stakeholders genuinely believe that the technical and economic power could make India a key player in the crypto and blockchain market. Gradually, the cryptocurrency is gaining mainstream acceptance, which could lead to raised adoption of digital currency.