Rich rewards often entail great risks, and the same holds true with the highly volatile cryptocurrency market. The uncertainties in 2020 globally led to a heightened interest of masses and large institutional investors in trading cryptocurrencies, a new-age asset class. CashTab XEC Increasing digitization, flexible regulatory framework, and supreme court lifting ban on banks dealing with crypto-based companies have parked investments greater than 10 million Indians within the last few year. Several major global cryptocurrency exchanges are actively scouting the Indian crypto market, that has been showing a sustained surge in daily trading volume within the last year amid a huge drop in prices as many investors looked at value buying. Since the cryptocurrency frenzy continues, many new cryptocurrency exchanges attended up in the united states that enables buying, selling, and trading by offering functionality through user-friendly applications. WazirX, India’s biggest cryptocurrency trading platform doubled its users in one 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. Within the last few 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 as a result of selection of factors such as for instance
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 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 among the Indian population. Nor does the less-than-friendly attitude of the government towards crypto or rumors swirling round the crypto have the ability to shake the confidence of the youth population in the digital coin market.
India offers the lowest priced 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 internet access, which enhances India’s potential to become one of many largest crypto economies in the world. In accordance with SimilarWeb, the united states may be the second-largest source 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 united states because it offers the young generation a fresh and fast way of earning money.
It is safe to say that cryptocurrency might become Indian millennials what gold is due to their parents!
Rise of Fintech Start ups
The cryptocurrency craze led to the emergence of multiple trading platforms such as for instance 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. Several platforms accept INR for purchases and trading fees as low as 0.1% so simple, fast, and secure platforms present a lucrative opportunity for both first-time investors and local traders.
WazirX is one of many 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 along with daily doers. Unocoin is one of many 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 the event of a security 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 a digital currency that could 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 government hasn’t planned to completely bar cryptocurrency use. In a record directed at a respected English newspaper, Deccan Herald, the Finance Minister said, “From our side, we’re specific that individuals aren’t shutting all options. We enables certain windows for individuals to do experiments on the blockchain, bitcoins, or cryptocurrency.” It is evident that the government is still scrutinizing the national security risks posed by cryptocurrencies before deciding on 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 anxiety about 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 sum total volume of Zebpay daily of Feb 2021 got equal 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 just only give you this clue that individuals aren’t closing our minds, we are looking at ways in which experiments could happen in the digital world and cryptocurrency.”
Rather than sitting on the side-lines, investors and stakeholders want to make the best of proliferating the digital coin ecosystem before government introduces the ban on “private” cryptocurrency and announced sovereign digital currency.
Is India Heading Towards Financial Inclusivity with Cryptocurrency?
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 led to more gender neutrality in the newest and digital kind of investment methods. Earlier, women used to stick to traditional investments nevertheless now they’re becoming risk-takers and venturing in to the crypto space in India. Following 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 a lot more than their male counterparts and more savings means more diversity in investments such as for instance high-return assets like cryptocurrencies. Also, women tend to be more analytical and better at evaluating risks before making the right investment choices, so they’re more successful investors.
Increasing Mainstream Institutional Adoption of Cryptocurrencies
Uncertainty and panic aroused by SARS-Covid 19 led to a liquidity crisis even prior to the economic crisis set off. Many investors converted their holdings into cash to guard their finances, which triggered the collapsed prices of bitcoin and altcoin. But although crypto suffered a major 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 profit its current design, folks have an elevated appetite for digital currencies which triggered the rebound of cryptocurrency. Due to the stellar performance of cryptocurrency in the midst of the global financial crisis, the uptrend has strengthened interest in the virtual currency market in Asia and the remaining portion of the world.
Furthermore, to fuel society’s demand for convenient and reliable transaction solutions, digital payment gateways such as for instance PayPal also have shown their support towards cryptocurrencies that can enable consumers to put up, 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 led to an international bitcoin price jump from USD40,000 to USD48,000 within two days. Two of the largest platforms to make payments across the entire world, Visa and Mastercard will also be endorsing cryptocurrencies by introducing them as a medium 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 long run 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 remain maintaining distance from crypto investments due to uncertainty concerning the legality of the digital coin ecosystem in India along with the high volatility of the market. Although the cryptocurrency market is booming since a year ago, Indians own less than 1% of the world’s bitcoin, which creates a proper disadvantage for the Indian economy. The Indian government is about to appoint a fresh panel to review the likelihood of regulating digital currencies in the united states along with concentrate on blockchain technology and propose it for technological enhancements.
The ability of blockchain technology to offer 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 newest recommendation from the committee could hold great value to determine the ongoing future of cryptocurrency in India. However, the stakeholders believe that the technical and economic power could 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.