This spike in crypto activity in India has come as a respite for exchanges, who have battling crash in trading volumes due to stiff crypto taxation norms and crypto winter. (iStockphoto)

Cryptocurrency Trading, Subscribed Users See India’s Leap on Stable Bitcoin

Bitcoin prices have been consolidating within an increasingly narrow range even as global stock and bond markets continue to walk the hard ground with mounting evidence of stress in the sovereign debt and currency markets this week.

On a 30-day basis, the price of Bitcoin (BTC) is up about 2%. In the traditional asset markets, the S&P 500 in the US is down 3%, while the BSE Sensex in India is down more than 1% on a one-month basis. These markets have seen a nice rally over the past few days. In the forex market, the rupee (INR) fell nearly 3% in September.

Shivam Thakral, CEO of BuyUcoin, said that the BTC-INR trading pair is getting a lot of traction from seasoned investors on the platform.

“The main reason behind this trend is a falling rupee and a falling stock market, which is driving investors towards digital assets. High inflation is leading to a rapid depletion of wealth and investors are looking to digital assets like bitcoin as a store of value to prevent inflationary damage to their wealth,” said Thackeral.

BuyUcoin saw a 40-45% rise in the BTC-INR trading pair and a 30% jump in new user subscriptions in Q2 FY2023.

Another cryptocurrency exchange Unocoin is seeing a similar trend.

“Compared to August, September had a better month. Daily user registrations increased by 20% and volumes by 40%,” said Sathvik Vishwanath, Co-Founder and CEO of Unocoin.

The surge in crypto activity in India came as a respite for exchanges, which have faced a crash in trading volumes due to strict crypto tax standards and a crypto winter.

In global markets, Bitcoin and Ethereum are down about 70% from their all-time highs.

The number of bitcoin trading in India is currently different from its global counterpart. Currently, most risky asset prices and volumes are primarily driven by global liquidity events.

However, in the Indian crypto market, INR-USD price volatility is also affecting the markets, especially the USDT-INR pair.

Generally, the Indian market enjoys a premium of around 5% due to the low liquidity across the exchanges due to various reasons. Moreover, the rupee has lost about 2% against the US dollar in the past two weeks, amplifying this premium and thus a spike in trading activity,” said Mahin Gupta, founder of LEMAL, a digital wallet infrastructure platform.

However, some experts are cautious about the slight increase in crypto activity in India.

According to Sidharth Sogani, founder and CEO of CREBACO Global, a research, rating, and intelligence firm focused on blockchain and cryptocurrency, cryptocurrency trading and user subscriptions may have seen some pickup, but it happened on a lower base.

Driven by a flat 30% tax on capital gains from crypto assets and a 1% tax deduction at the source on every crypto transaction, as well as an up to 80% drop in the price of digital assets, trading activity on crypto exchanges has fallen 80-90% since April 1, 2022.

However, Sujani sees crypto market sentiment improving, especially bitcoin in the near future.

The expert sees Bitcoin remaining stable despite difficult inflation and reaching the $30,000 level in the next 2-3 months.

“Basically, bitcoin is very strong. There are a few key parameters that work in favor of it. Transaction fees are all-time low, transaction speed is good, difficulty level and hash rate is at an all-time high. The number of bitcoin wallets is also increasing. When the basics are great and the price doesn’t do much, that’s a very good sign.”

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