India’s crypto market: an attack after the closure

“Global institutions are targeting India, and the next encryption “Silicon Valley” is emerging? “

India has always been regarded by mainstream institutions as one of the markets with investment potential: India has the world’s sixth largest economy, and young people account for a high proportion of the total population.

In the crypto market in the first half of 2021, “Indian characteristics” are being released. According to Chainalysis’s global DeFi adoption index in mid-October (the index measures the adoption of Bitcoin and Crypto by three indicators: the reception and transfer of crypto value on the chain, and the measurement of related activities ), in 154 countries And in the region, India’s adoption of Crypto has ranked second.

This is closely related to the change in the attitude of the government and the changes in the market environment.

India's crypto market: an attack after the closure

(Data source: usefultulips)

The rise in data and the easing of policies

The Supreme Court of India lifted the previous “crypto ban” by the Central Bank of India in March 2020, which became a turning point for the region. After the reopening of banking services to this industry, a series of changes followed.

This impact is quickly reflected in the issuance and usage of DApps in the region. The Indian project Polygon (then Matic Network) has ushered in an increase in usage. In a single month, more than 60 DApps based on Polygon have increased. , And a quarter are from India. In addition, in the following two months, the number of registered Indian crypto exchange WazirX in India increased by 150%, and the transaction volume increased by 66%.

This is only the short-term data at the time. Looking at the long-term period, this growth has been continuing. Localbitcoins data shows that after April 2020, India’s Crypto P2P transaction volume has started a long-term growth trend.

Taking June 2021 as the observation node, in the first half of this year, the digital asset investment of Indian residents has continued to rise from US$200 million in 2020 to US$40 billion in the first six months of this year. The daily trading volume of the four major Crypto exchanges soared to US$102 million from US$10.6 million a year ago. Comprehensive data shows that at that time, 15 million Indians were expected to participate in the Crypto transaction, mainly from the 18-35-year-old youth group.

This number is still expanding. Just in the past October, Nischal Shetty, the founder of WazirX, India’s largest Crypto trading platform, said on Twitter: It is estimated that there are now close to 20 million Crypto users in India.

On the other hand, also in June this year, the Indian government’s stance on Crypto became more moderate. That month, the local media The New Indian Express reported that the Indian government’s position on Bitcoin is changing. The Indian government has abandoned its original ban on Bitcoin and intends to classify Crypto currency as an alternative asset category.

This proposed regulatory approach has also made progress recently. According to the content of multi-media reports, India is likely to supervise encrypted digital assets as “commodities”, and impose appropriate taxation on transactions and proceeds, and further supervision The method will be introduced in February next year. In addition, the Securities and Exchange Commission of India will also cooperate with the Indian Ministry of Finance to jointly supervise the formulation of the country’s Crypto regulations. The Ministry of Finance and the Reserve Bank of India (RBI) will also participate in the adjustment of the Crypto regulatory framework.

It is worth noting that treating digital currency as a type of “commodity” is a different approach from the qualitative “securities” that the mainstream regulatory thinking in the United States has long favored. This once again releases a new signal to the market. Officials of the Indian Parliament also publicly expressed the peculiarities of the relevant Indian bills, and their position is to recognize the importance of the Crypto field. The country has not yet achieved full account exchange. India cannot adopt the Crypto-related policies of developed economies and will not follow the example of the United States, Japan or El Salvador.

At present, the Indian Ministry of Finance has established a committee to review the scope of crypto currency taxation. The few details of the Crypto transaction they are discussing are whether income can be taxed as capital gains and whether to create a new tax category.

India: Investment targets targeted by the global market

In this context, between 2020 and 2021, the global market’s investment in Crypto in India has surged.

Statistics show that since this year, the Indian blockchain industry has completed 16 transaction financings with a total amount of more than 627 million US dollars, which is 14.25 times that of last year. Last year, 10 local transactions were concluded with a total value of only 44 million U.S. dollars.

In this year’s market, India’s most representative encryption projects have appeared in the Layer 2 project Polygon (Matic), the Indian Crypto exchange WazirX, the Layer 0 expansion agreement Marlin, etc., mainly based on the original blockchain infrastructure. In addition, the global market has increasingly invested in the Indian Crypto sector, and trading platforms have become popular investment targets for VCs and institutions.

For example, just in the past October, CoinSwitch Kuber completed a US$260 million Series C financing with a valuation of US$1.9 billion, led by Andreessen Horowitz (a16z) and Coinbase Ventures, and investors Tiger Global and Sequoia Sequoia Capital India participated in the investment.

This is a very representative financing case: this is a16z’s first investment in India, and it is also Tiger Global’s first investment in India’s Crypto company.

This kind of enthusiasm quickly spread to the Indian financial market. A month ago, the fund management giant Invesco Mutual Fund submitted a document to the Indian Securities and Exchange Commission for investment in the Invesco Elwood global blockchain stock ETF.

Crypto has also brought changes to the Indian blockchain industry. According to a market analysis published by the British blockchain consulting company Dappros, as of November this year, the number of Indian blockchain developers has ranked second in the world. Second only to the United States, followed by the United Kingdom, Canada and France. A total of 12,509 Indian developers to use Ethernet Square , Solidity, books and super block chain development (number of people were 2381,1432,19627,1579). Relative to the population, based on the rough calculation of the population of India, there is one blockchain developer for every 100,000 people.

India’s National Association of Software and Service Companies (Nasscom) stated in the “Indian Crypto Industry” that in the past five years, the Crypto industry, including transactions, applications, P2P payments, remittances, and retail, has grown in scale in the past five years. 39%, Indian retail investors have invested about 6.6 billion U.S. dollars in crypto assets. The industry has brought jobs for 50,000 employees, more than 230 start-up companies and more than 150 concepts and projects to India. At the same time, it is predicted that by 2030, India’s Crypto technology market has the potential to create more than 800,000 jobs and US$184 billion in economic added value.

but. The policy risks of the Indian authorities and the risks of changes in the market background still exist, and these data still need to be carefully referenced.

Unique preferences of “Indian Concept”

The rapid expansion of the Indian crypto market is based on a certain market environment and historical background. Some people believe that the “major blockade” during the new crown epidemic has greatly intensified the insufficiency of local financial services, and the Indian market is concerned about digital banking services. The demand has increased significantly.

In the “Interpretation of the Status Quo of the Indian Digital Currency Ecosystem” released by Coinpaprika and OKEx, in the first quarter of 2020, mainstream trading platforms ushered in a substantial increase in Indian traffic. OKEx’s new registered users from India increased by 4100% during the same period.

Nischal Shetty, the founder of Indian crypto exchange WazirX, also agrees with this statement. During the “Great Lockdown” in 2020, for those who sit at home because of the lockdown, want to learn new things, and learn about new opportunities from the outside world, Crypto has become One of the first choices. In WazirX’s public information, the transaction volume in 2020 is more than 1,000% longer than the previous year, and even stated that “every two to three months, the number of new registered users almost doubles.”

In this context, in India’s second- and third-tier cities, young people aged 25 to 34 are the main force in the Crypto field and have formed some market preferences with local characteristics.

In 2021, due to the government’s regulatory attitude and specific rules are still unclear, many Crypto users turn to Telegram and WhatsApp to participate in transactions, and account for 60-80% of the total transaction volume in certain time intervals.

Another very influential and impetus thing was in May this year, when V God transferred 960 million SHIB worth of 960 million to the Indian Crypto Anti-epidemic Foundation. After that, the holdings of SHIB in India skyrocketed, and SHIB once became a hot topic on Indian Twitter. In the Meme market last week, the trading platform WazirX stated that SHIB has replaced Bitcoin as the most traded token in the Indian rupee market, with a trading volume of US$489 million.

The concept of “Crypto” is still spreading in India. During this year’s Olympics, the trading venue Bitbns also introduced Crypto-related rewards for Indian athletes participating in the Olympics, and athletes who win medals can receive Crypto as gifts. For example, the gold medalist can get about $2,700 in Crypto. This asset will be obtained on the platform after the athlete completes the KYC. In India, the first athletes to receive free awards were weightlifter winner Mirabai Chanu and badminton player PV Sindhu.

This influence and change may bring enlightenment to investors who pay attention to the Indian market: The Indian region was once a more recognized hot spot for investment in gold and precious metals, and when Crypto appeared, the investment process was simplified and the coverage was more extensive. For extensive. Although the value of digital assets held by Indian investors is still only part of the gold market, some trends have already emerged.

In the future, with the further clarification and improvement of the risks of the Indian government’s regulatory environment and regulatory rules, it may further affect the development of this industry in the local area.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-11-04 02:46
Next 2021-11-04 02:52

Related articles