Rich rewards often come with enormous risks, and the same is true of the highly volatile cryptocurrency market. Uncertainty around the world in 2020 has fueled growing interest among the masses and large institutional investors in trading cryptocurrencies, an asset class of the new age.
What is driving the world’s largest crypto exchange into the Indian market?
In 2019, the world’s largest cryptocurrency exchange by trading volume, Binance acquired the Indian trading platform WazirX. Coin DCX, another crypto startup, has secured investments from Seychelles-based BitMEX and San Francisco-based giant Coinbase. Crypto and blockchain startups in India have attracted $ 99.7 million in investments by June 15, 2021, which amounted to approximately $ 95.4 million in 2020. Over the past five years, global investments within the Indian crypto market have grown by a whopping 1487%.
Despite India’s unclear guidelines, global investors are betting on various factors such as:
• Tech-savvy Indians
The main population of 1.39 billion is young (average age between 28 and 29 years) and tech-savvy. While the older generation still prefers to invest in gold, real estate, patents or stocks, the newer cryptocurrency exchanges are taking on at high risk because they can adapt better to them. India ranks 11th in Chainalysis 2020 report list for global adoption of crypto, demonstrating the enthusiasm of the Indian population for crypto. The unfriendly attitude of the government towards crypto or the rumors circulating about crypto cannot shake the confidence of the young population in the digital coin market.
India has the cheapest internet in the world, where a gigabyte of mobile data costs around $ 0.26 while the global average is $ 8.53. Thus, almost half a billion users are using affordable internet access, increasing 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 after the peer-to-peer bitcoin trading platform Paxful. While the mainstream economy is still struggling with the “pandemic effects”, cryptocurrencies are gaining traction in the country as they offer the younger generation a new and quick way to make money.
It’s safe to say that cryptocurrencies could be Indian millennials like gold to their parents!
• Rise of fintech startups
The cryptocurrency craze has led to the emergence of several trading platforms such as WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin and many others. This cryptocurrency exchange is highly secure, accessible across multiple platforms and enables instant transactions, and provides crypto enthusiasts with a user-friendly interface to buy, sell or trade unlimited digital assets. Many of those platforms accept INR for purchases and trading fees as low as 0.1%, making the straightforward , fast and secure platform 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 transaction opportunities. CoinSwitch Kuber offers the best cryptocurrency exchange platform for Indians and is great for beginners as well as daily gamers. Unocoin is one of the oldest cryptocurrency exchanges in India, covering more than a million merchants via a mobile app. CoinDCX offers users over 100 cryptocurrencies as a trading option and even offers investors insurance to cover losses in the event of a security breach. Global investors are therefore watching the plethora of cryptocurrency exchange platforms in India to capitalize on emerging markets.
• Mixed government response
Bill huhng banning virtual currencies will criminalize anyone who possesses, involved in the issuance, mining, trading, and transfer of crypto assets can be enforced by law. However, Finance and Enterprise Minister Nirmala Sitharaman tempered some investors’ concerns by saying the government has no plans to ban the use of cryptocurrencies entirely. In a statement to I in the UK newspaper Deccan Herald, the Treasury Secretary said: “We are very clear on our part that we are not closing all options on cryptocurrencies. It is clear that the government is still investigating the national security risks posed by cryptocurrencies before deciding to ban them entirely.
In March 2020, the Supreme Court overturned the central bank’s decision to ban financial institutions from handling cryptocurrencies, encouraging investors to enter the cryptocurrency market. Despite the ongoing fear of bans, the volume of transactions continues to grow and the registrations and cash inflows from users on local crypto exchanges are 30 times higher than last year. Unocoin, one among the oldest exchanges in India, added 20,000 users in January and February 2021. The total Zebpay volume per day in February 2021 corresponds to the volume generated in February 2020. Regarding the cryptocurrency scenario in India, the minister of finance said during a CNBC-TV18 interview: “I can only offer you this hint that we aren’t closing our minds, but are looking for ways to experiment in the world of digital and cryptocurrencies . “
Instead of sitting on the sidelines, investors and stakeholders want to make the most of the digital coin ecosystem until the government introduces a ban on “private” cryptocurrencies and declares a sovereign digital currency.