Rich rewards often entail great risks, and the same goes for the very volatile cryptocurrency market. Uncertainty in 2020 on a global scale has led to increased interest of the masses and major institutional investors in trading cryptocurrencies, a class of assets of modern times. Increasing digitization, a flexible regulatory framework and lifting the Supreme Court’s ban on banks dealing with crypto companies have parked the investments of more than 10 million Indians over the past year. Several major global cryptocurrency exchanges are actively studying the Indian crypto market, which has been showing steady growth in daily trading volume over the past year amid a sharp drop in prices as many investors looked to buy value. As the cryptocurrency frenzy continues, the country has many new cryptocurrency exchanges that allow you to buy, sell and trade, offering functionality through user-friendly programs. WazirX, India’s largest cryptocurrency trading platform, doubled the number of users from one million to two million from January to March 2021.
What is pushing the world’s largest cryptocurrencies to the Indian market?
In 2019, Binance acquired the Indian trading platform WazirX, the world’s largest cryptocurrency exchange by trading volume. Another crypto startup, Coin DCX, has received investments from BitMEX in Seychelles and giant Coinbase from San Francisco. By June 15, 2021, crypto and blockchain startups in India had attracted $ 99.7 million in investment, or about $ 95.4 million in 2020. Over the past five years, global investment in the Indian crypto market has grown by a whopping 1487%.
Despite India’s vague policies, global investors are betting heavily on the country’s digital coin ecosystem due to many factors such as
• Technologically savvy Indian population
The vast majority of 1.39 billion people are young (average age 28 to 29) and technology-savvy. While the older generation still prefers to invest in gold, real estate, patents or stocks, newer ones prefer high-risk cryptocurrency exchanges because they are more adapted to them. India ranks 11th on the list of the Chainalysis report for 2020 on the global use of the crypt, which shows the admiration of the crypt among the Indian population. Also, the government’s hostility to the crypt or rumors circulating around the crypt are also unable to shake young people’s confidence in the digital coin market.
India offers the cheapest internet in the world, where one gigabyte of mobile data costs about $ 0.26 and the global average – $ 8.53. As a result, nearly half a billion users enjoy affordable internet access, increasing India’s potential to become one of the world’s largest cryptocurrencies. According to SimilarWeb, the country is the second largest source of web traffic for Paxful’s peer-to-peer bitcoin trading platform. While the mainstream economy is still struggling with the “pandemic effect,” cryptocurrency is gaining momentum in the country as it gives the younger generation a new and faster way to make money.
It is safe to say that cryptocurrency can become an Indian millennial than gold for their parents!
• Growth of fintech startups
The fascination with cryptocurrencies has led to the emergence of several trading platforms such as WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin and many others. These cryptocurrency exchange platforms are highly secure, available on a variety of platforms and allow instant transactions, providing a user-friendly interface for cryptocurrency enthusiasts to buy, sell or trade digital assets limitlessly. Many of these platforms charge INR for purchases and trading fees of 0.1%, so simple, fast and secure platforms represent a lucrative opportunity for both first-time investors and local traders.
WazirX is one of the leading cryptocurrency exchange platforms with more than 900,000 users, providing customers with peer-to-peer transactions. CoinSwitch Kuber provides the best cryptocurrency exchange platform for Indians and is ideal for both beginners and everyday people. Unocoin is one of the oldest cryptocurrency exchange platforms in India, accounting for over a million traders through mobile apps. CoinDCX provides users with over 100 cryptocurrencies as an exchange option and even provides investors with insurance to cover security breaches. Thus, global investors are considering many cryptocurrency exchange platforms in India to take advantage of the emerging market.
• Mixed government response
A bill banning virtual currency, which criminalizes all those involved in the possession, issuance, extraction, trade and transfer of crypto assets, could be passed into law. However, Finance and Corporate Affairs Minister Nirmala Sitharaman has eased concerns among some investors, saying the government has no plans to completely ban the use of cryptocurrency. In a statement to the leading English newspaper Deccan Herald, the finance minister said: “We are very clear that we are not closing all options. We will allow people to experiment with blockchain, bitcoins or cryptocurrency.” Obviously, the government is still studying national security risks who carry cryptocurrencies before deciding on a total ban.
In March 2020, the Supreme Court overturned a central bank decision to ban financial institutions from engaging in cryptocurrencies, prompting investors to flock to the cryptocurrency market. Despite long-standing fears of a ban, transaction volumes continued to increase, and user registration and cash inflows to the local cryptocurrency exchange increased 30 times than a year ago. One of India’s oldest exchanges, Unocoin added 20,000 users in January and February 2021. The total volume of Zebpay on February 2021 became equivalent to the volume generated for the entire month of February 2020. Deciding on the cryptocurrency scenario in India, the Finance Minister said in an interview with CNBC-TV18: “I can only make it clear to you that we are not closing our minds, we are looking for ways to experiment in the digital world and cryptocurrency.”
Instead of sitting aside, investors and stakeholders want to do their best to spread the digital coin ecosystem until the government imposes a ban on “private” cryptocurrency and declares a sovereign digital currency.
Is India moving towards financial inclusion through cryptocurrency?
Once considered a “boys’ club ”due to the predominant participation of the male population in the cryptocurrency market, the ever-increasing number of women investors and traders has led to more gender neutrality in the new digital form of investment methods. Women used to stick to traditional investments, but now they are taking risks and going into India’s cryptospace. After the Supreme Court clarified the legitimacy of India’s cryptocurrency platform “virtual currency”, CoinSwitch witnessed an exponential 1000% increase in the number of its female users. Although women investors still make up a small percentage of the crypto community, they are creating stiff competition in the Indian market. Women tend to save much more than their male counterparts, and more savings means more variety in investments such as high-yield assets such as cryptocurrencies. In addition, women are more analytical and better at assessing risks before making the right investment choices, so they are more successful investors.
Increasing the widespread institutional acceptance of cryptocurrencies
Uncertainty and panic caused by SARS-Covid 19 led to a liquidity crisis even before the economic crisis. Many investors converted their assets into cash to protect their finances, leading to a collapse in bitcoin and altcoin prices. But despite the fact that the crypt has suffered a major collapse, it still managed to become the best asset class in 2020. With the growing 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 has led to a rebound of cryptocurrency. Due to the stellar performance of cryptocurrency in the midst of the global financial crisis, the upward trend has increased interest in the virtual currency market in Asia and the rest of the world.
In addition to fueling society’s demand for convenient and reliable transaction solutions, digital payment gateways such as PayPal have also demonstrated their support for cryptocurrencies that allow consumers to hold, buy or sell virtual assets. Tesla CEO Elon Musk recently announced a $ 1.5 billion investment in the cryptocurrency market and that the electric company would accept bitcoins from buyers, leading to a jump in international bitcoin prices from $ 40,000 to $ 48,000 over two days. Two of the largest payment platforms worldwide, Visa and Mastercard, also support cryptocurrencies, providing them as a medium for transactions. While Visa has already announced the authorization of transactions with stable coins in the Ethereum blockchain, Mastercard will start transactions from the crypt in 2021.
What awaits the future of the cryptocurrency market in India?
The Indian cryptocurrency market is not immune to terrible crypto-failures. Despite huge investments from global counterparts, local investors still keep their distance from crypto-investments due to uncertainty in the legitimacy of India’s digital coin ecosystem as well as high market volatility. Although the cryptocurrency market has been evolving since last year, Indians own less than 1% of the world’s bitcoin, creating a strategic disadvantage for the Indian economy. The Government of India plans to appoint a new group to study the possibility of regulating digital currencies in the country, as well as to focus on blockchain technology and propose it for technological improvements.
The ability of blockchain technology to provide secure and unchanging infrastructure has been implemented by various industries to ensure transaction transparency. For a country with more than 15 million cryptocurrency users, the new committee recommendation could be of great importance for determining the future of cryptocurrency in India. However, stakeholders believe that technical and economic power will make India a key player in the crypto and blockchain market. Gradually, cryptocurrency is gaining widespread recognition, which could lead to a wider spread of digital currency.
According to another TechSci Research report on “India’s cryptocurrency market By proposals (Hardware and software), By process (Mining and transactions), By type (Bitcoin, Etgereum, Bitcoin Cash, Ripple, Dashcoin, Litecoin, others), By end users (banking, real estate, stock market and virtual currency) ), By Regions, Forecasts and Opportunities, 2026 “, India’s cryptocurrency is expected to grow with significant CAGR due to increased transparency requirements and reduced transaction costs. In addition, the growing proliferation of digital currency and the growth of blockchain technology are fueling the cryptocurrency market .