Crypto has gained steam in the last couple of years as millions of investors in India turn to the digital currency. In a country where gold has been the top choice among investors, a shift to crypto is seen as a major step in the digital currency revolution.
The fact that Indian households own more than 25,000 tonnes of gold is a testament to the precedence enjoyed by the precious metal in the country. Nevertheless, crypto has managed to attract a growing number of investments in India.
A statement from Chainanalysis shows that crypto investments in India grew from $923 million in April 2020 to about $6.6 billion in May 2021. The blockchain data firm also mentions that India ranks 11 out of 154 nations in terms of cryptocurrency adoption.
A change in outlook
In April 2018, RBI shut the doors on the digital currency with a blanket ban that prevented banks from facilitating any cryptocurrency-related transactions.
However, in March 2020, the Supreme Court of India turned down this decision, opening the doors for cryptocurrencies in the country. In May 2021, RBI issued a statement advising banks to not cite its 2018 circular to deny services to cryptocurrency investors and platforms.
This change in the mindset has resulted in a manifold rise in the demand for digital currencies. It has driven the 612% rise in the number of cryptocurrency users in the country between April 2020 and May 2021.
Thriving cryptocurrency space is fueled by India’s youth
Experts say that this growth comes from the 18–35-year-old age group. Younger people are more comfortable using this new digital currency for their online activities and purchases. One area of strong growth has been in the Indian betting market. Ajay Singh from Baazi King says that "Crypto & blockchain technology provides a safe & secure payment platform for online betting activities. Cryptocurrency allows the user to conveniently deposit money, and yet retain full control over their money."
More and more investors in this age bracket prefer cryptocurrencies over gold. The ease of investing, transparency, and returns over a short period of time are greater than gold or property.
In terms of numbers, India, with nearly 15 million crypto investors has taken over the UK that has around 2.3 million of its citizens who have parked their money in cryptocurrencies. Looking at India’s current growth rate, this nation of 1.39 billion people is likely to soon catch up with the 23 million crypto users in the U.S.A.
The elderly are also joining in on the action as suggested by the data from CoinSwitch Kuber, one of the largest cryptocurrency platforms in India. The platform attracted the highest number of users over 65 years of age in April 2021.
There has been a significant rise in the daily trading volume on the top four cryptocurrency platforms in India. CoinGecko suggests that the daily trading volume went from $10.6 million in 2020 to $102 million in 2021 on these exchanges.
There has been uncertainty around the regulations for cryptocurrency in the country for quite some time. The government is considering a bill which can provide a legislative framework for an official digital currency. This can bring about a new chapter in the growth story of cryptocurrency in India.
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