Rich rewards often entail great risks, and the exact same is true with the highly volatile cryptocurrency market. The uncertainties in 2020 globally generated a heightened interest of masses and large institutional investors in trading cryptocurrencies, a new-age asset class. Increasing digitization, flexible regulatory framework, and supreme court lifting ban on banks dealing with crypto-based companies have parked investments of more than 10 million Indians within the last few year. Several major global cryptocurrency exchanges are actively scouting the Indian crypto market, which includes been showing a sustained surge in daily trading volume in the last year amid a huge drop in prices as much investors viewed value buying. Because the cryptocurrency frenzy continues, many new cryptocurrency exchanges came up in the united kingdom 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 set 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 with 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 purchase gold, real estate, patents, or equities, the newer ones are embracing the high-risk cryptocurrency exchanges since 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 federal government towards crypto or rumors swirling around the crypto have the ability to shake the confidence of the youth population in the digital coin market.
India offers the least expensive internet in the world, where one gigabyte of mobile data costs around $0.26 as the global average is $8.53. So, almost half the billion users are benefiting from affordable access to the internet, which enhances India’s potential to become among the largest crypto economies in the world. In accordance with SimilarWeb, the country may be the second-largest supply of web traffic to peer-to-peer bitcoin trading platform, Paxful. While the mainstream economy remains struggling from the “pandemic effect”, cryptocurrency is gaining momentum in the united kingdom as it offers the young generation a brand new and fast means of earning money.
The cryptocurrency craze generated 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 get, sell, or trade digital assets limitlessly. A number of these platforms accept INR for purchases and trading fees as little as 0.1% so simple, fast, and secure platforms present a lucrative opportunity for both first-time investors and local traders.
WazirX is among the leading cryptocurrency exchange platforms with over 900,000 users that gives customers with peer-to-peer transaction capabilities. CoinSwitch Kuber provides the most effective cryptocurrency exchange platform for Indians and is ideal for beginners as well as daily doers. Unocoin is among the oldest cryptocurrency exchange platforms in India that account fully for over a million traders through mobile applications. CoinDCX provides users with 100+ cryptocurrencies being an option to create 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 take advantage 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 could easily get enacted into law. However, Finance and Corporate Affair Minister Nirmala Sitharaman eased some investor’s concerns saying that the federal government hasn’t planned to completely bar cryptocurrency use. In a record fond of a leading English newspaper, Deccan Herald, the Finance Minister said, “From our side, we are clear that individuals aren’t shutting all options. We enables certain windows for people to do experiments on the blockchain, bitcoins, or cryptocurrency.” It is evident that the federal government remains scrutinizing the national security risks posed by cryptocurrencies before selecting putting a whole 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 into 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 volume of Zebpay each day of Feb 2021 got equivalent to the volume 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 just only give you this clue that individuals aren’t closing our minds, we are looking at ways in which experiments can occur in the digital world and cryptocurrency.”
As opposed to 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” due to predominant male population engagement in the cryptocurrency market, the steadily rising quantity of women investors and traders has generated more gender neutrality in the newest and digital type of investment methods. safe trading Earlier, women used to stay glued to traditional investments however now they’re becoming risk-takers and venturing into the crypto space in India. After the apex court clarified the legality of “virtual currency”, the Indian cryptocurrency platform, CoinSwitch witnessed an exponential 1000% escalation in its women users. Although women investors still make up a small percentage of the crypto community, they’re adding fierce competition in the Indian market. Women tend to truly save much 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 proper investment choices, so they’re more successful investors.
Increasing Mainstream Institutional Adoption of Cryptocurrencies
Uncertainty and panic aroused by SARS-Covid 19 generated a liquidity crisis even before the economic crisis set off. Many investors converted their holdings into cash to safeguard their finances, which led to the collapsed prices of bitcoin and altcoin. But even though crypto suffered a major crash, it still was able to be the most effective performing asset class of the entire year 2020. With the increased vulnerability of the system and loss of trust in the policies of the central bank and money in its current design, people have an increased appetite for digital currencies which led to the rebound of cryptocurrency. Because of the 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 may enable consumers to carry, 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 generated an international bitcoin price jump from USD40,000 to USD48,000 within two days. Two of the biggest platforms to make payments across the planet, Visa and Mastercard will also be endorsing cryptocurrencies by introducing them as a medium to create transactions. While Visa has recently 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 future hold for the Cryptocurrency market in India?
The Indian cryptocurrency market isn’t immune to the terrible crypto crashes. Despite humongous investment from global counterparts, local investors continue to be maintaining distance from crypto investments due to uncertainty in regards to the legality of the digital coin ecosystem in India as well as the high volatility of the market. Although the cryptocurrency market is booming since a year ago, Indians own significantly less than 1% of the world’s bitcoin, which creates an ideal disadvantage for the Indian economy. The Indian government is about to appoint a brand new panel to study the possibility of regulating digital currencies in the united kingdom as well as give attention to 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 nation with over 15 million crypto adopters, the newest recommendation from the committee could hold great value to ascertain the future of cryptocurrency in India. However, the stakeholders genuinely believe that the technical and economic power is likely to make India a vital player in the crypto and blockchain market. Gradually, the cryptocurrency is gaining mainstream acceptance, which may lead to raised adoption of digital currency.