Wealthy rewards often carry great risks, as does the highly volatile cryptocurrency market. Uncertainties in 2020 have led to a massive increase in the interest of large institutional investors in cryptocurrencies, a class of assets of the new era. Growing digitalization, a flexible regulatory framework և The Supreme Court lifted the ban on banks dealing with crypto-based companies has halted the investments of more than 10 million Indians in the last year. Several major global cryptocurrency exchanges are actively pursuing the Indian crypto market, which has seen steady daily trading volume over the past year amid falling prices as many investors look to buy value. As the cryptocurrency rampant continues, many new cryptocurrency exchanges have sprung up in the country, offering the ability to buy, sell, and trade, offering functionality through user-friendly applications. WazirX, India’s largest cryptocurrency trading platform, doubled its users from one million to two million between January and March 2021.
What drives the world’s largest crypto exchanges to the Indian market?
In 2019, the world’s largest cryptocurrency exchange Binance, Binance acquired the Indian trading platform WazirX. Another crypto startup, Coin DCX, secured investments from Seychelles BitMEX և San Francisco-based giant Coinbase. Crypto-blockchain start-ups have invested $ 99.7 million in India as of June 15, 2021, which is about $ 95.4 million by 2020. Over the past five years, global investment in the Indian crypto market has grown by one. huge 1487%.
Despite India’s incomprehensible policies, global investors are making huge bets on the country’s digital coin ecosystem due to a number of factors, such as:
• Indigenous people with technical skills
The predominant population of 1.39 billion is young (average age 28 to 29 years old) with a mastery of technology. While the older generation still prefers to invest in gold, real estate, licenses, or stocks, the newer ones accept high-risk cryptocurrency exchanges because they are more adaptable to them. India ranks 11th in Chainalysis’s 2020 Global Crypto Acceptance Report, which shows the growing popularity of crypto among the Indian population. Neither the government’s unfriendly attitude towards crypto nor the rumors circulating about crypto can shake the confidence of the young population in the digital coin market.
India offers the cheapest internet in the world, where one gigabyte of mobile data costs about $ 0.26, while the world average is $ 8.53. Thus, almost half of the billion users use the Internet, which increases India’s potential to become one of the largest crypto economies in the world. According to SimilarWeb, the country is the second largest source of web traffic for the bitcoin trading platform Paxful. While the mainstream economy is still struggling with the “epidemic effect”, cryptocurrency is gaining momentum in the country as it gives the younger generation a new, faster way to make money.
It is safe to say that cryptocurrencies could be what Indian gold was for their parents for millennia.
• The rise of Fintech start-ups
The cryptocurrency craze has led to the emergence of many trading platforms such as WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin and many more. These cryptocurrency exchange platforms are highly secure, available on a variety of platforms, and allow instant transactions, providing a friendly interface for crypto enthusiasts to buy, sell, or trade unlimited digital assets. Many of these platforms accept INR purchases և up to 0.1% for commercial payments, so simple, fast and secure platforms offer 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, providing clients with trading opportunities with partners. CoinSwitch Kuber provides the best cryptocurrency exchange platform for Indians, ideal for both beginners and everyday performers. Unocoin is one of the oldest cryptocurrency exchange platforms in India with over one million traders using mobile applications. CoinDCX provides users with 100+ cryptocurrencies as an exchange option; it even provides investors with insurance to cover losses in the event of a security breach. Thus, global investors expect the abundance of cryptocurrency exchange platforms in India to take advantage of the emerging market.
• Mixed government response
A virtual currency ban bill that would criminalize anyone involved in the possession, issuance, mining, trading or transfer of cryptocurrencies could enter into force. However, Finance Minister Nirmala Sitaraman allayed the concerns of some investors, saying the government had no plans to ban the use of cryptocurrencies altogether. In a statement to one of the leading English newspapers, the Deccan Herald, the Minister of Finance said: “We are very clear that we do not close all the options. We will allow certain windows for people to experiment with blockchains and bitcoins. , or cryptocurrency. ” It is clear that the government is still carefully studying the national security risks posed by cryptocurrencies before deciding to impose a complete ban.
In March 2020, the Supreme Court overturned the Central Bank’s decision to ban financial institutions from trading in cryptocurrencies, prompting investors to flock to the cryptocurrency market. Despite the long-standing fear of a ban, transaction volumes continued to grow, with գրանց user registration: cash inflows on the local crypto-exchange increasing 30 times over a year earlier. Unocoin, one of the oldest exchanges in India, added 20,000 users in January-February 2021. The total daily volume of Zebpay in February 2021 is equivalent to the volume generated in February 2020. Referring to the cryptocurrency scenario in India, the Minister of Finance said in an interview with CNBC-TV18. “I can only give you this hint that we are not closing our minds, we are looking for ways to experiment in the digital world, in cryptocurrency.”
Instead of sitting side by side with investors, stakeholders want to make the most of the digital coin ecosystem until the government imposes a ban on “private” cryptocurrencies, declaring itself the dominant digital currency.
Is India moving towards financial inclusion in cryptocurrency?
Formerly considered the Boys’ Club, due to the predominance of the male population in the cryptocurrency market, the steady increase in the number of female investors and traders has led to more new gender neutral investment horses. In the past, women used to stick to traditional investments, but now they are becoming risk takers, invading the crypto space in India. After the Supreme Court ruled that the Indian cryptocurrency platform was a “virtual currency”, CoinSwitch saw a 1000% increase in its female users. While female investors still make up a small percentage of the crypto community, they are in fierce competition in the Indian market. Women tend to save a lot more than their male counterparts և More savings mean more investment, such as high-yield assets such as cryptocurrencies. In addition, women are more analytical, better at risk before making the right investment choice, so they are more successful investors.
Increasing the main institutional acceptance of cryptocurrencies
The uncertainty and panic caused by SARS-Covid 19 led to a liquidity crisis even before the onset of the economic crisis. Many investors converted their assets into cash to protect their finances, which led to the collapse of bitcoin and cryptocurrency prices. But even if the crypto crashed, it still managed to be the best result of the 2020 asset class. Due to the vulnerability of the system և the policy of the Central Bank և and the loss of confidence in its current currency, people have increased their appetite for digital currencies, which has led to the return of cryptocurrencies. In the midst of the global financial crisis, the cryptocurrency’s stellar growth rates boosted interest in the virtual currency market in Asia and the rest of the world.
Moreover, digital payment gateways such as PayPal have also shown their support for cryptocurrencies that can enable consumers to hold, buy or sell virtual assets to stimulate public demand for convenient, reliable transaction solutions. Tesla CEO Elon Musk recently announced a $ 1.5 billion investment in the cryptocurrency market that the electric company would accept bitcoin from buyers, which led to a two-fold jump in the international price of bitcoin from $ 40,000 to $ 48,000. days. Two of the largest payment platforms in the world, Visa և Mastercard, also approve cryptocurrencies, presenting them as a means of transactions. While Visa has already announced that it will allow stable currency transactions on the Ethereum blockchain, Mastercard will start trading cryptocurrencies in 2021.
What is the future of the Indian cryptocurrency market?
The Indian cryptocurrency market is not free of terrible cryptocurrency crashes. Despite the huge investments of global partners, local investors are still keeping away from crypto investments due to the uncertainty of the legitimacy of the digital currency ecosystem in India, as well as the high volatility of the market. Although the cryptocurrency market has been booming since last year, Indians own less than 1% of the world bitcoin, which creates 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 improvement.
The ability of blockchain technology to provide a secure, unchanging infrastructure has been implemented by different sectors to instill transparency in transactions. For a country hosting more than 15 million cryptocurrencies, the committee’s new recommendation could be of great value in determining the future of cryptocurrency in India. However, stakeholders believe that the technical and economic strength will make India a major player in the cryptocurrency market. Gradually, cryptocurrency is gaining in popularity, which may lead to higher digital currency adoption.
According to another TechSci Research Report “Indian Cryptocurrency Market By offer (hardware և software), by process (mining և transaction), by type (Bitcoin, Etgereum, Bitcoin Cash, Ripple, Dashcoin, Litecoin, etc.), by end user (banking, real estate, stock market և virtual Currency: By region, Forecast & Opportunities, 2026 ”, India’s cryptocurrency is expected to grow by a significant CAGR due to transparency կրճատ reduced transaction costs. In addition, the growing adoption of digital currency and growing blockchain technology are boosting the Indian cryptocurrency market.