India’s Crypto Market Suffers Significantly – Experts Say Trading Volumes Likely Won’t Recover Anytime Soon CryptoBlog
Crypto trading volumes in India have dropped significantly this year. FTX’s collapse exacerbated the problem, hurting “sentiment across crypto tokens.” Local crypto experts do not expect a recovery in the near future “unless something drastic happens” in the upcoming Union budget.
India’s crypto market has been ‘dead’ since April, expert says
Cryptocurrency trading volumes on major exchanges in India have dropped significantly this year. Since the collapse of crypto exchange FTX, major exchanges in India have lost between 34% and 50% in trading volumes, Moneycontrol reported on Monday, citing data from research firm Crebaco. However, the decline began long before FTX’s implosion. One of India’s largest crypto trading platforms, Wazirx, lost 97.99% of its trading volumes from the start of the year to December 22.
Crebaco CEO Sidharth Sogani told the publication:
I don’t think much of this recent drop in trading volume was caused by FTX. The market in India has been dead since April 2022.
“I don’t expect any action or recovery for the sector in India in the next six months until something big is announced in the Union budget,” he continued. .
Wazirx Vice President of Marketing, Rajagopal Menon, said, “It all boils down to removing/reducing TDS (withholding tax) and capital gains without offsetting losses. No one is trading on Indian stock exchanges because of this.
In this year’s Union Budget 2022, the Indian government imposed a 30% income tax on virtual digital assets, including cryptocurrencies and non-fungible tokens (NFTs), and a TDS of 1% on all transactions of 10,000 rupees ($121) or more.
Menon pointed out:
Unless something dramatic happens in this year’s budget, we don’t see a steady recovery in trading volumes any time soon.
How FTX’s Collapse Affects India’s Crypto Industry
“Indian users haven’t been hit too hard by FTX except for sentiment. Negative sentiment around the sector has been exaggerated by FTX,” a senior crypto exchange official told the publication. The person clarified:
Indian investors, after TDS, switched to Binance and not FTX because Binance had peer-to-peer (P2P) transactions, FTX not. If you have INR, the only foreign exchanges you can trade on are Binance and Kucoin.
Sogani also explained that the collapse of FTX hurt “sentiment in crypto tokens.” He added, “What came out later pushed the crypto industry back a few years.”
Meanwhile, India has still not developed a policy on crypto. Indian government plans to discuss crypto regulation with G20 countries in a bid to implement a technology-driven regulatory framework for crypto assets, the country’s finance minister previously revealed. The government has recently update Parliament on the status of its Cryptocurrency Bill.
India’s central bank, the Reserve Bank of India (RBI), has continued to push for a ban on all cryptocurrencies, such as bitcoin and ether. RBI Governor Shaktikanta Das recently said that the the next financial crisis will come from crypto if we let it grow.
Do you think the Indian government will announce anything positive for the crypto industry next year? Let us know in the comments section below.
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