Wealthy rewards often carry great risks, and so does the highly volatile cryptocurrency market. The uncertainties of 2020 led to an increase in the interest of the masses and large institutional investors in trading cryptocurrencies, a new age asset class. The increase in digitization, the flexible regulatory framework and the Supreme Court’s ban on lifting banks dealing with cryptography-based companies have parked investments of more than 10 million Indians in the last year. Several major global cryptocurrency exchanges are actively exploring India’s cryptocurrency market, which has shown a continued increase in daily trading volume over the past year amid a sharp drop in prices as many investors watched the purchase of value. As the frenzy of cryptocurrencies continues, many new cryptocurrency exchanges have emerged in the country that allow you to buy, sell and trade by offering functionalities through easy-to-use applications. WazirX, India’s largest cryptocurrency trading platform, doubled its users from one million to two million between January and March 2021.
What is driving the world’s largest cryptocurrency exchanges in the Indian market?
In 2019, the world’s largest cryptocurrency exchange by trading volume, Binance acquired the Indian trading platform WazirX. Another cryptocurrency launch, Coin DCX secured the investment of Seychelles-based BitMEX and San Francisco-based Coinbase. Emerging cryptography and blockchain companies in India have attracted an investment of $ 99.7 million on June 15, 2021, amounting to about $ 95.4 million in 2020. In the last five years, the Global investment in India’s crypto market has risen a whopping 1487%.
Despite India’s unclear policy, global investors are heavily betting on the country’s digital currency ecosystem due to various factors such as
• Indian population with technical knowledge
The predominant population of 1,390 million is young (average age between 28 and 29 years) and with technical knowledge. While the older generation still prefers to invest in gold, real estate, patents, or equity, the newer ones accept high-risk cryptocurrency exchanges because they are more adaptable to them. India ranks 11th on the list of the 2020 Chainalysis report for global adoption of cryptography, which demonstrates the excitement of cryptography among the Indian population. Nor can the government’s less friendly attitude towards cryptography or the rumors revolving around the crypt shake the confidence of the youth population in the digital currency market.
India offers the cheapest Internet in the world, where a gigabyte of mobile data costs around $ 0.26, while the global average is $ 8.53. Thus, almost half of the one billion users take advantage of affordable internet access, which increases India’s potential to become one of the largest cryptographic economies in the world. According to SimilarWeb, the country is the second largest source of web traffic for the peer-to-peer bitcoin trading platform, Paxful. While the dominant economy continues to struggle for the “pandemic” effect, cryptocurrency is gaining momentum in the country as it provides the younger generation with a new quick way to make money.
It is safe to say that cryptocurrency could become Indian millennials, what gold is for their parents!
• Rise of Fintech Start-ups
The fashion of cryptocurrencies led to the emergence of multiple trading platforms such as WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin and many others. These cryptocurrency exchange platforms are highly secure, accessible across multiple platforms, and allow for instant transactions, providing a user-friendly interface for cryptography enthusiasts to buy, sell, or trade unlimited digital assets. Many of these platforms accept INR for purchases and trading commissions 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 the leading cryptocurrency exchange platforms with over 900,000 users offering customers peer transaction capabilities. CoinSwitch Kuber provides the best cryptocurrency trading platform for Indians and is ideal for both beginners and everyday workers. Unocoin is one of the oldest cryptocurrency exchange platforms in India representing over one million traders through mobile applications. CoinDCX provides users with more than 100 cryptocurrencies as an option for trading and even provides investors with insurance to cover losses in the event of a security breach. Therefore, global investors are looking at the large number of cryptocurrency trading platforms in India to take advantage of the emerging market.
• Mixed government response
The bill on a ban on a virtual currency that would criminalize anyone with possession, issuance, mining, trading and transfer of cryptographic assets could be enacted into law. However, the Minister of Finance and Corporate Affairs, Nirmala Sitharaman, eased the concerns of some investors by saying that the government does not plan to completely ban the use of cryptocurrencies. In a statement to a leading English newspaper, the Deccan Herald, the finance minister said: “For our part, we are very clear that we are not closing all options. We will allow certain windows for people to experiment on the blockchain. , bitcoins, or cryptocurrency “. It is clear that the government is still studying the national security risks posed by cryptocurrencies before deciding on the full ban.
In March 2020, the Supreme Court overturned the central bank’s decision to ban financial institutions from dealing in cryptocurrencies, prompting investors to enter the cryptocurrency market. Despite the persistent fear of a ban, transaction volumes continued to rise and user registration and money inflows to the local cryptocurrency exchange multiplied by 30 compared to a year ago. One of the oldest exchanges in India, Unocoin added 20,000 users in January and February 2021. The total volume of Zebpay per day in February 2021 was equivalent to the volume generated throughout the month of February 2020. Addressing the cryptocurrency scenario in India, the Minister said in a CNBC-TV18 interview: “I can only give you this clue that we are not closing our minds, we are studying ways in which experiments can take place in the digital world. and the cryptocurrency. “
Instead of staying on the sidelines, investors and stakeholders want to do their best to proliferate the digital currency ecosystem until the government introduces a “private” cryptocurrency ban and announces the sovereign digital currency. .
Is India moving towards financial inclusion with cryptocurrency?
Once considered a “boys’ club ”due to the predominant participation of the male population in the cryptocurrency market, the growing number of women investors and traders has led to greater gender neutrality in the new digital form of investment methods. Before, women used to follow traditional investments, but now they are becoming risk-takers and venturing into the cryptographic space of India. After the apex court clarified the legality of the “virtual currency,” the Indian cryptocurrency platform, CoinSwitch witnessed an exponential 1000% increase in its female users. While women investors continue to represent a small percentage of the crypto community, they maintain fierce competition in the Indian market. Women tend to save much more than their male counterparts and more savings means more diversity in investments such as high-yield assets such as cryptocurrencies. In addition, women are more analytical and better assess risks before making the right investment decisions, so they are more successful investors.
Increase in the main institutional adoption of cryptocurrencies
The uncertainty and panic aroused by SARS-Covid 19 caused a liquidity crisis even before the economic crisis began. Many investors turned their holdings into cash to safeguard their finances, which led to falling bitcoin and altcoin prices. But even though cryptography suffered a major crash, it remained the best-performing asset class of 2020. With the increased vulnerability of the system and the loss of confidence in central bank policies and money in its current design, people have an increased appetite for digital currencies, which led to the recovery of the cryptocurrency. Due to the stellar performance of cryptocurrencies amid the global financial crisis, the upward trend has bolstered interest in the virtual currency market in Asia and the rest of the world.
In addition, to fuel society’s demand for convenient and reliable transaction solutions, digital payment gateways like PayPal have also shown their support for cryptocurrencies that can allow consumers to hold, buy or sell with virtual assets. Recently, Tesla CEO Elon Musk announced a $ 1.5 billion investment in the cryptocurrency market and that the power company would accept bitcoins from buyers, leading to an international jump in bitcoins from 40,000 to 48,000. dollars in two. days. Two of the largest payment platforms in the world, Visa and Mastercard, also support cryptocurrencies by introducing them as a means to make transactions. Although Visa already made the announcement to allow transactions with stable currencies in the Ethereum blockchain, Mastercard would begin transactions with cryptography in 2021.
What awaits us from the future for the cryptocurrency market in India?
The Indian cryptocurrency market is not immune to terrible cryptocurrency blockages. Despite large investment from global counterparts, local investors continue to distance themselves from cryptocurrency investments due to uncertainty about the legality of the digital currency ecosystem in India and high market volatility. Although the cryptocurrency market has been booming since last year, Indians own less than 1% of the world’s bitcoin, which creates a strategic disadvantage for the Indian economy. The Indian government plans to appoint a new group to study the possibility of regulating digital currencies in the country, as well as focus on blockchain technology and propose it for technological improvements.
Several industries have achieved the ability of blockchain technology to provide a secure and unchanging infrastructure to instill transparency in transactions. For a country with more than 15 million cryptocurrency adopters, the committee’s new recommendation could be of great value in determining the future of cryptocurrency in India. However, stakeholders believe that technical and economic power will make India a key player in the cryptography and blockchain market. Gradually, cryptocurrency is gaining widespread acceptance, which could lead to greater adoption of digital currency.
According to another TechSci Research Report on “India’s Cryptocurrency Market By offer (hardware and software), by process (mining and transaction), by type (Bitcoin, Etgereum, Bitcoin Cash, Ripple, Dashcoin, Litecoin, others), by end user (banking, real estate, stock market and virtual currency), By region, forecast and opportunities, 2026 “, India’s cryptocurrency is expected to grow at a significant CAGR due to the growing requirement for transparency and reduced transaction costs. In addition, the growing adoption of digital currency and the growing blockchain technology fuels the cryptocurrency market of India.