Rich rewards often lead to big risks, and so does the highly volatile cryptocurrency market. Uncertainties in 2020 have led to an increase in interest in cryptocurrency trading, a new class of assets, on a global scale by the masses and large institutional investors. Increasing digitalization, a flexible regulatory framework, and the Supreme Court’s lifting of bans on banks working with cryptocurrency companies have halted the investment of more than 10 million Indians in the past year. Several major global cryptocurrency exchanges are actively exploring the Indian cryptocurrency market, which has seen steady growth in daily trading over the past year amid falling prices as many investors look for valuable purchases. As the cryptocurrency frenzy continues, many new cryptocurrency exchanges have emerged in the country, offering functionality through user-friendly applications that allow you to buy, sell and trade. WazirX, India’s largest cryptocurrency trading platform, increased its users from one million to two million between January and March 2021.
What is dragging the world’s largest cryptocurrency exchanges into the Indian market?
Binance, the world’s largest cryptocurrency exchange by trading volume, bought the Indian trading platform WazirX in 2019. Another cryptocurrency startup, Coin DCX, provided investment from BitMEX in the Seychelles and giant Coinbase in San Francisco. Cryptocurrency and blockchain startups in India have attracted $ 99.7 million in investment by June 15, 2021, up from about $ 95.4 million in 2020. Over the past five years, global investment in the Indian cryptocurrency market has increased once. large 1487%.
Despite India’s uncertain policy, global investors are betting heavily on the country’s digital coin ecosystem for a variety of reasons.
• Technology-savvy Indian population
The predominant population of 1.39 billion is young (average age 28-29) and is aware of technology. While the older generation still prefers to invest in gold, real estate, patents or stocks, the new generation is embracing them because they are better able to adapt to high-risk cryptocurrency exchanges. India ranks 11th in the global acceptance of cryptocurrency in the 2020 report of Chainalysis, which shows the excitement about crypto among the Indian population. The government’s attitude to cryptocurrency or the rumors surrounding cryptocurrency does not undermine young people’s confidence in the digital coin market.
India offers the world’s cheapest internet, where a gigabyte of mobile data costs about $ 0.26 and the global average price is $ 8.53. Thus, almost half a billion users use affordable Internet, which enhances India’s potential to become one of the world’s largest crypto economies. According to SimilarWeb, the country is the second largest source of internet traffic to the peer-to-peer bitcoin trading platform Paxful. Although the main economy is still struggling with the “pandemic effect”, the cryptocurrency, which provides a new and faster way for the younger generation to make money, is gaining momentum in the country.
It is safe for parents to say what gold is, that cryptocurrency can become the millennium of India!
• The rise of Fintech Start-ups
The cryptocurrency frenzy has led to the emergence of many 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 for cryptocurrency lovers by providing a friendly interface for unlimited buying, selling or trading digital assets. Many of these platforms set the INR for purchases and trading fees as low as 0.1%, 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 more than 900,000 users and offers customers peer-to-peer transaction capabilities. CoinSwitch Kuber provides the best cryptocurrency exchange platform for Indians and is ideal for both beginners and everyday workers. Unocoin is one of the oldest cryptocurrency exchange platforms in India, covering more than one million traders through mobile applications. CoinDCX offers users 100+ cryptocurrencies to exchange and even insures investors to cover losses in the event of a security breach. Thus, global investors are looking at a plethora of cryptocurrency exchange platforms in India to take advantage of the emerging market.
• Mixed Government Response
A bill banning virtual currency could come into force, criminalizing anyone involved in the ownership, issuance, drilling, trading and transfer of crypto assets. However, Finance and Corporate Affairs Minister Nirmala Sitharaman eased concerns among some investors, saying the government did not plan to completely ban the use of cryptocurrency. In a statement to Britain’s leading newspaper, the Deccan Herald, the finance minister said: “On our part, we make it very clear that we have not closed all options. We will allow certain windows for people to experiment with blockchain, bitcoins, or cryptocurrency.” It is clear that the government is still investigating 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 engaging in cryptocurrencies, prompting investors to flock to the cryptocurrency market. Despite fears of a ban, the volume of transactions continued to grow, and user registration and cash inflows at the local cryptocurrency exchange increased 30 times compared to a year ago. Unocoin, one of India’s oldest exchanges, added 20,000 users in January and February 2021. In February 2021, the total volume of Zebpay was equal to the volume created during the entire month of February 2020. In an interview with CNBC-TV18, the Finance Minister, who is tackling the cryptocurrency scenario in India, said, “I can only give you a hint that we are not closing our minds, we are looking at ways in which experiments can happen in the digital world and cryptocurrency.”
Instead of sitting on the sidelines, investors and stakeholders want to make the most of the spread of the digital coin ecosystem until the government bans the “private” cryptocurrency and declares a sovereign digital currency.
Is India Towards Financial Inclusion with Cryptocurrency?
The steady increase in the number of female investors and traders, once considered the “Boys’ Club” due to the dominance of men in the cryptocurrency market, has led to greater gender neutrality in new and digital forms of investment methods. In the past, women remained committed to traditional investments, but now they are becoming risk takers and entering the crypto space in India. After the Apex court clarified the legitimacy of the “virtual currency”, the Indian cryptocurrency platform, CoinSwitch witnessed a 1000% exponential increase in the number of female users. Although female investors are still a small part of the crypto community, they are fiercely competitive in the Indian market. Women tend to save more than their male counterparts, and greater savings mean greater diversity in investments such as high-yield assets such as cryptocurrencies. Also, women are more analytical and better assess the risks before making the right investment choice, so they are more successful investors.
Increasing the basic institutional acceptance of cryptocurrencies
The uncertainty and panic created by SARS-Covid 19 led to a liquidity crisis even before the economic crisis began. Many investors have turned their shares into cash to protect their finances, which has resulted in lower prices for bitcoin and altcoin. But even though the cryptocurrency suffered a major crash, it managed to become the best performing asset class of 2020. With the growing weakness of the system and the loss of confidence in the central bank’s policy and money in its current design, people have a growing appetite for digital currencies, resulting in the return of cryptocurrencies. Due to the excellent performance of the cryptocurrency in the middle of the global financial crisis, the upward trend has strengthened the interest in the virtual currency market in Asia and the rest of the world.
In addition, digital payment gateways, such as PayPal, have also supported cryptocurrencies that allow consumers to store, buy, or sell virtual assets to increase society’s need for convenient and secure transaction solutions. Tesla CEO Elon Musk recently announced that he had invested $ 1.5 billion in the cryptocurrency market and that the power company would accept bitcoin from buyers, raising the international price of bitcoin from $ 40,000 to $ 48,000 in two years. day Visa and Mastercard, two of the largest payment platforms in the world, also endorse cryptocurrencies as a tool for transactions. Although Visa has already announced that it will allow transactions with stable coins on the Ethereum blockchain, Mastercard will start trading in cryptocurrency in 2021.
What awaits the future of the cryptocurrency market in India?
India’s cryptocurrency market is not immune to terrible cryptocurrency accidents. Despite the large investments of their global counterparts, local investors are still reluctant to invest in cryptocurrency due to the uncertainty surrounding the legitimacy of the digital coin ecosystem in India and the high volatility of the market. Although the cryptocurrency market has grown rapidly since last year, Indians own less than 1% of the world’s bitcoin, which is a strategic disadvantage for the Indian economy. The Indian government plans to set up a new panel to explore the possibilities of regulating digital currencies in the country, as well as focus on blockchain technology and offer suggestions for technological improvements.
The ability of blockchain technology to provide a secure and unchanging infrastructure has been implemented by various industries to instill transparency in operations. For a country with 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 technical and economic power will make India a major player in the cryptocurrency and blockchain market. Gradually, cryptocurrency is gaining general acceptance, which may lead to higher adoption of digital currency.
According to someone else TechSci Research “Indian Cryptocurrency Market By Offer (Hardware and Software), By Process (Minning and Transaction), By Type (Bitcoin, Etgereum, Bitcoin Cash, Ripple, Dashcoin, Litecoin, etc.), By End User (Banking, Real Estate, Exchange and Virtual Currency ), Region, Forecast & Opportunities, 2026 “, Indian cryptocurrency is expected to grow at a significant CAGR level due to increased transparency requirements and reduced operating costs. In addition, increasing adoption of digital currency and increasing blockchain technology are strengthening India’s cryptocurrency market.