Bitcoin has jumped more than 80% in 2023 and the overall crypto market is now touching $1.19 trillion.
“Most Indian crypto investors bought digital assets when the market was on a tear, and when in 2022 market corrected sharply, their portfolios shrank substantially. Now they are just waiting to recover their initial investments. The 30% crypto tax has really dampened the enthusiasm of Indian crypto investors, further adding to their apprehension regarding the recovery prospects of their portfolios,” said Vishal Gupta, a Noida-based crypto investor.
Chahal Verma, a Gurgaon-based crypto investor said 2023 has proven to be an interesting year for the crypto markets, particularly when it comes to Bitcoin despite regulatory hurdles.
ETtech“Despite the market’s ongoing challenges, such as the SEC’s backlash on major exchanges like Coinbase and Binance, Bitcoin has defied expectations. One of the driving forces behind the recent price surge is the news of BlackRock, the world’s largest asset management company, applying for a Bitcoin ETF ( exchange-traded fund). If approved, this development could potentially trigger a massive influx of funds into the Bitcoin market. Additionally, the highly anticipated Bitcoin halving is scheduled for next year, further fuelling optimism among investors,” she said.
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Another investor, Mumbai-based software engineer Ashwin Nadar, said that the crypto markets have surged and so has the mania, fuelled by Memecoins like Pepe and Ordinals (NFTs on Bitcoin) attracting a new wave of speculators.
“From a regulatory standpoint, SEC (Securities and Exchange Commission of the US) was causing mayhem by declaring popular altcoins as securities and filing lawsuits against Binance and Coinbase, leading to excessive dollar outflows from those platforms. Hopefully, SEC approval for Blackrock’s Bitcoin ETF seems to keep markets buoyant but one has to keep in mind this rally once again is highly correlated with bigtech rally, which implies crypto could dip once stocks start dropping,” he said.
Seasoned market trackers like Nadar say that entry of TradFi Giants like Citadel, Schwab, Fidelity and BlackRock could signal a new era of crypto adoption and restore some trust in institutions.
Rajagopal Menon, vice president, WazirX, said transactions on WazirX peaked between February and March 2023.
“Bitcoin purchase by users was aligned with its price increase for most parts of the duration. Ethereum has been the token with the most number of users on the platform, followed by SHIB, USDT, BTC and DOGE,” he said.
The Indian exchanges, which are currently grappling with a staggering decline of over 90% in trading volumes, are urging the government to adopt a more accommodating policy towards cryptocurrencies, aligning with the approach taken by other prominent emerging global centres.
“The regulations for digital assets are moving at a great speed with Dubai, UK, Hong Kong and South Korea emerging as fertile markets for the growth of the crypto ecosystem. In India, regulations can prove to be a game changer for the crypto industry,” said Shivam Thakral, CEO of BuyUcoin, India’s second longest-running crypto exchange.
New crypto startups, although scarce in number, are also beginning to witness some traction in the market.
Jaideep Yadav, founder of dRisk, a new crypto startup said, “We are quite bullish on 2023, given the cold crypto market in 2022. When dRisk launched our new project in January 2023, we anticipated weaker demand for games, however, we were pleasantly surprised when our first major campaign hit over 30,000 new sign ups and more than 40,000 games played on our platform in just two months”.
Following a year of rapid growth in 2021, during which a record number of Indians joined the crypto market, 2022 brought significant losses to most investors as crypto prices plummeted to their lowest point in two years.
The downturn was compounded by the government’s announcement in February of a 30% tax on all profits made from crypto trading, as well as a 1% levy on every transaction, which had a crippling effect on the country’s crypto ecosystem, including investors, traders and exchanges.
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