According to a statement from Chainalysis, “In India, where households own more than 25,000 tonnes of gold, crypto investments grew from about $923 million in April 2020 to nearly $6.6 billion in May 2021.” It represents a nearly 612% rise in the number of cryptocurrency users in our country. The largest Indian crypto platform,
, has boarded almost 6 million active users since its inception in June 2020.
A mindset shift
Earlier in 2018, just when the crypto fire was lit in the country, the government put it off by introducing a blanket ban on banks preventing them from facilitating crypto transactions. It stemmed from the fear that the anonymity of cryptos would give way to frauds and underworld activities.
However, in May 2020, the supreme court quashed the ban stating that there were no grounds for placing such a ban on cryptocurrencies.
With this statement, the cryptocurrency spark was reignited among Indians. Within weeks of lifting the blanket ban imposed by RBI, Indian investors rushed to make the most of their lost time. Since then, the volumes of traders and trading has been on a drastic rise month on month.
The virtual boom amid regulatory uncertainty
As the equivocation and resentment against cryptocurrencies wear off in India, the largest cryptocurrency – Bitcoin, is quickly becoming a favourite for Indians who were always known for being ardent investors of gold. Indians are now catching up with the 23 million crypto users in the U.S and way beyond the 2.3 million crypto users in the U.K. Experts say that the cryptocurrency growth in a country like India is significantly fuelled by the youth between 18-35 years of age, most of whom happen to be first-time investors.
International organizations are hiring some young back-end engineers as more contractors accept payments in cryptocurrencies since it makes the whole international transaction process much easier and less time-consuming.
Elderly and women jump in too
Another development in the Indian crypto space is that the elderly and women are also entering this highly volatile market.
Ashish Singhal, CEO and founder of
, the largest cryptocurrency platform, said, “The elderly, too, are becoming more and more tech-savvy and see nothing strange in allocating their savings to assets via swipes on their phones in a bid to diversify their investment bouquet”.
He added to it, saying, “The interesting part is that their activity matches the young folks.” CoinSwitch Kuber witnessed a nearly 35% increase in investors over 45 years of age in the past few months.
The crypto space in India now comprises over 15%, female investors. Data suggest that in the last year alone, the count of women investors rose by nearly 1400% across all exchanges. However, it is noteworthy that this positive uplift in female crypto users isn’t just India-centric and extends across the globe into more sturdy economies such as the United States.
A fresh boost to the crypto industry
Not only are retail investors interested in a slice of India’s crypto pie, but many overseas funds are flowing into the newly established cryptocurrency platforms being set up in India.
CoinSwitch Kuber is one of a handful of crypto exchanges that are in operation in India. Recently, in a Series B round, the startup amassed $25 million from a reputed VC named Tiger Global at a valuation of $500 million.
The industry estimates indicate that India could hold a potential investor base of 10 crores and upward as the cryptocurrencies get more lucrative.
An alternative to gold?
Gold has always been the most popular investment in India. However, data from the World Gold Council suggested that adults below 34 are less drawn to gold than older and more traditional Indians.
While the Indian market for cryptocurrencies is still a sliver compared to its gold holdings, it is clear that its popularity is growing in the sub-continent. According to CoinGecko, the four largest cryptocurrency platforms in India, including
, saw a jump in the daily trading volume from $10.6 million a year ago to $102 million today.
The increasing adoption of cryptocurrencies is another sign that the investment mindset of Indians is evolving rapidly from being highly conservative to more open to new markets and opportunities.
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