Rich rewards often entail great risks, and exactly the same does work 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. 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 in the last year. Several major global cryptocurrency exchanges are actively scouting the Indian crypto market, that has been showing a sustained surge in daily trading volume over the past year amid a huge drop in prices as numerous investors looked over value buying. Because the cryptocurrency frenzy continues, many new cryptocurrency exchanges came up in the united kingdom that permits 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 launch, CashTab XEC 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 way of a whopping 1487%.
Despite India’s unclear policy, global investors are making huge bets on the country’s digital coin ecosystem due to a selection 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. As 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 us government towards crypto or rumors swirling across the crypto can shake the confidence of the youth population in the digital coin market.
India offers the cheapest internet on earth, where one gigabyte of mobile data costs around $0.26 while the global average is $8.53. So, almost half the billion users are taking advantage of affordable internet access, which enhances India’s potential to become among the largest crypto economies in the world. According to SimilarWeb, the nation could be the second-largest source of web traffic to peer-to-peer bitcoin trading platform, Paxful. As the mainstream economy remains struggling from the “pandemic effect”, cryptocurrency is gaining momentum in the united kingdom as it provides the young generation a brand new and fast method of earning money.
It’s safe to say that cryptocurrency might become Indian millennials what gold is for their parents!
Rise of Fintech Start ups
The cryptocurrency craze led to 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 a friendly interface for crypto enthusiasts to purchase, sell, or trade digital assets limitlessly. Several 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 provides customers with peer-to-peer transaction capabilities. CoinSwitch Kuber provides the best cryptocurrency exchange platform for Indians and is fantastic 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 as an option to create 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 an electronic currency that will criminalize anyone engaged in possession, issuance, mining, trading, and transferring crypto assets may get enacted into law. However, Finance and Corporate Affair Minister Nirmala Sitharaman eased some investor’s concerns saying that the us government hasn’t planned to completely bar cryptocurrency use. In a record fond of a number one English newspaper, Deccan Herald, the Finance Minister said, “From our side, we’re clear that individuals are not shutting all options. We enables certain windows for people to accomplish experiments on the blockchain, bitcoins, or cryptocurrency.” It’s evident that the us 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 to the cryptocurrency market. Inspite of the lingering fear of ban, transaction volumes continued to swell, and user registration and money inflows at local crypto-exchange became 30-fold from the year ago. Among India’s oldest exchanges, Unocoin added 20,000 users in January and February of 2021. The full total level of Zebpay daily of Feb 2021 got equal to the quantity generated in the entire 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 individuals are not closing our minds, we are considering ways by which experiments could happen 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 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” because of predominant male population engagement in the cryptocurrency market, the steadily rising number of women investors and traders has led to more gender neutrality in the brand new and digital form of investment methods. Earlier, women used to stick to traditional investments however now they’re becoming risk-takers and venturing 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% upsurge in its women users. Although women investors still make up a small percentage of the crypto community, they’re setting up 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-return assets like cryptocurrencies. Also, women are far 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 led to a liquidity crisis even prior to the economic crisis set off. Many investors converted their holdings into cash to shield their finances, which resulted in the collapsed prices of bitcoin and altcoin. But although crypto suffered a significant crash, it still managed to be the best performing asset class of the entire 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, people have an increased appetite for digital currencies which resulted in the rebound of cryptocurrency. Due to the stellar performance of cryptocurrency in the middle of the global financial crisis, the uptrend has strengthened interest in 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 also have shown their support towards cryptocurrencies that can 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 led to an international bitcoin price jump from USD40,000 to USD48,000 within two days. Two of the largest platforms in making payments across the planet, Visa and Mastercard are also endorsing cryptocurrencies by introducing them as a medium to create 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 isn’t immune to the terrible crypto crashes. Despite humongous investment from global counterparts, local investors are still maintaining distance from crypto investments because of uncertainty in regards to the legality of the digital coin ecosystem in India as well as the high volatility of the market. Even though the cryptocurrency market is booming since this past year, Indians own significantly less than 1% of the world’s bitcoin, which creates an ideal disadvantage for the Indian economy. The Indian government is planning to appoint a brand new panel to review the chance of regulating digital currencies in the united kingdom as well as give attention to blockchain technology and propose it for technological enhancements.
The ability of blockchain technology to supply 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 brand new recommendation from the committee could hold great value to ascertain the continuing 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, that could lead to raised adoption of digital currency.