The Cryptocurrency space in India has been seeing an unrest for the recent years. Notwithstanding the vagueness in guidelines and outrageous instability, a large number of Indians incline toward putting resources into cryptographic forms of money rather than gold. Almost 15 million Indians have put resources into digital currencies.
As per an assertion from Chainalysis, “In India, where families own in excess of 25,000 tons of gold, crypto speculations developed from about $923 million in April 2020 to almost $6.6 billion in May 2021.” It addresses an almost 612% ascent in the number of cryptographic money clients in our country. The biggest Indian crypto stage, CoinSwitch Kuber, has boarded just about 6 million dynamic clients since its beginning in June 2020.
A mindset shift
This massive surge in the growth of cryptocurrencies happens to be set in the backdrop of ambiguity. While the future is still uncertain for digital currencies, the government is beginning to realize that the technology could be way more significant than the economics of the currency itself.
Earlier in 2018, just when the crypto fire was lit in the country, the government put it off by introducing a blanket ban on banks preventing them from facilitating crypto transactions. It stemmed from the fear that the anonymity of cryptos would give way to frauds and underworld activities. However, in May 2020, the supreme court quashed the ban stating that there were no grounds for placing such a ban on cryptocurrencies.
With this statement, the cryptocurrency spark was reignited among Indians. Within weeks of lifting the blanket ban imposed by RBI, Indian investors rushed to make the most of their lost time. Since then, the volumes of traders and trading has been on a drastic rise month on month.
The virtual boom amid regulatory uncertainty
As the equivocation and resentment against cryptocurrencies wear off in India, the largest cryptocurrency – Bitcoin, is quickly becoming a favourite for Indians who were always known for being ardent investors of gold. Indians are now catching up with the 23 million crypto users in the U.S and way beyond the 2.3 million crypto users in the U.K. Experts say that the cryptocurrency growth in a country like India is significantly fuelled by the youth between 18-35 years of age, most of whom happen to be first-time investors.
International organizations are hiring some young back-end engineers as more contractors accept payments in cryptocurrencies since it makes the whole international transaction process much easier and less time-consuming.
A fresh boost to the crypto industry
Not only are retail investors interested in a slice of India’s crypto pie, but many overseas funds are flowing into the newly established cryptocurrency platforms being set up in India. CoinSwitch Kuber is one of a handful of crypto exchanges that are in operation in India. Recently, in a Series B round, the startup amassed $25 million from a reputed VC named Tiger Global at a valuation of $500 million. The industry estimates indicate that India could hold a potential investor base of 10 crores and upward as the cryptocurrencies get more lucrative.
An alternative to gold?
Gold has always been the most popular investment in India. However, data from the World Gold Council suggested that adults below 34 are less drawn to gold than older and more traditional Indians. While the Indian market for cryptocurrencies is still a sliver compared to its gold holdings, it is clear that its popularity is growing in the sub-continent. According to CoinGecko, the four largest cryptocurrency platforms in India, including CoinSwitch Kuber, saw a jump in the daily trading volume from $10.6 million a year ago to $102 million today.
The increasing adoption of cryptocurrencies is another sign that the investment mindset of Indians is evolving rapidly from being highly conservative to more open to new markets and opportunities.
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