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India’s struggle with crypto continues despite Bitcoin spike

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In Short:

Bitcoin reached a record high of $73,600, with Indian exchanges showing increased trading volumes. While the market is growing, tax issues and lack of clear regulations are hindering investment. Major global investment firms are acquiring significant Bitcoin holdings. India remains cautious towards cryptocurrencies, impacting local crypto businesses. Industry experts emphasize the need for better regulation to attract more investors. Expanding beyond cryptocurrencies may also help these businesses grow.

The Rise and Fall of Bitcoin in India

The cryptocurrency world is buzzing with excitement as Bitcoin hit a record high of over $73,600 on Wednesday, marking a remarkable threefold surge in just six months.

Indian Crypto Exchanges on the Rise

The volumes on Indian exchanges have surged as well. Crypto exchange WazirX saw its daily average trading volume jump to $3.4 million in February from $780,000 in September. Similarly, CoinDCX experienced a significant increase in its daily average trading volume as well.

Challenges Faced by Indian Exchanges

Despite the recent growth, both exchanges are still far from their peak volumes. Regulatory clarity, India’s crypto taxation policies, and negative statements from government officials have all contributed to a sense of apprehension among retail investors.

The Impact of Taxation

According to industry experts, aggressive taxation is a major hurdle for the return of bulk traders. The TDS rate applicable for crypto trades in India poses challenges for regular investors, dampening the sentiment in the market.

Global Investments in Bitcoin

The approval of ETFs for Bitcoin tokens by the US Securities and Exchange Commission has stirred up excitement in the global investment community. Major players like BlackRock, Grayscale, and Fidelity have acquired significant Bitcoin assets under management.

Looking Towards the Future

With Bitcoin’s market cap surging and a looming ‘halving’ event expected to reduce the token supply, market experts believe that the cryptocurrency is on a path to further growth.

Challenges and Opportunities in India

While the crypto industry in India faces regulatory uncertainties and challenges, there is also a strong belief in the potential of cryptocurrency investments. Diversification and innovative strategies are expected to play a key role in the future of the industry.

Industry Collaboration and Regulatory Support

Lack of collaboration among Indian exchanges and the absence of constructive regulations have hindered the growth of the cryptocurrency market in the country. The need for industry cooperation and regulatory clarity is essential for the development of crypto assets as a viable investment class.

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