Crypto exchange launch offers to combat up to 99.8% drop in volumes this Diwali

Driven by 30% flat tax on capital gains from crypto assets and 1% withholding tax (TDS) on every crypto transaction, as well as up to 85% drop in digital asset prices, trading activity on crypto exchanges has all but dried up in India.

The two biggest crypto assets, Bitcoin and Ether, are trading up to 75% lower compared to their all-time highs, while other major tokens like Cardano and Solana have crashed up to 85% year-to-date.

According to data available with CoinGecko, a digital currency pricing and data platform, in a 30-day period, WazirX has recorded a 24-hour trading volume in the range of $1 million to $3 million. Compared to this, the platform had witnessed a 24-hour trading volume of more than $535 million on October 28, 2021.

BitBNS had recorded a peak trading volume of over $110 million on October 28, 2021, while the exchange’s past 30-day volume has ranged between $11 million and $15 million.

On its platform, WazirX has launched Shagun and Muhurat offers, where users can get free WRX tokens (WRX) by using the gift card feature and trade cryptos on the platform with zero fees for a specific time period during October 20-26.

Rajagopal Menon, vice president of marketing, WazirX, believes that the gift card feature can go a long way in converting no-coiners into crypto users.

Furthermore, WazirX is introducing Muhurat Trading this year, where users can trade Bitcoin, Ether, WRX, Shiba Inu, Dogecoin and other cryptos for zero fees in all WazirX markets (rupee, tether or WRX).

Bitbns has launched the crypto gift card option for new users. A select few will have a chance to win a cashback, where they will receive BNS tokens.

Also, weTrade, a Bengaluru-based crypto startup, has launched an offer where users can refer and earn one USDT (Tether) for each referral.

Colexion, a blockchain-based non-fungible token (NFT) marketplace, is offering new users on its platforms a chance to win prizes.

In India, crypto as a gift has picked up in recent years with these assets’ prices beating returns from traditional assets.

Over a nine-year period (since the data is available on CoinGecko), Bitcoin has returned 28,139%, while Ether is up 299,496% since its launch in 2015.

Industry leaders believe that crypto gift cards can evoke gift feelings during the festivities, and at the same time provide greater value for money.

“With Diwali around the corner, we know that people invest in physical assets whose value usually increases in the future. Now is the time for people not only to invest in virtual currencies based on blockchain technology, but to take advantage of the benefits offered by cryptocurrencies as a gift to others who have gained momentum over the years as a valuable resource,” said Sakina Arsiwala, co-founder. Taki, a blockchain-based social network.

With the offerings launched during the festive season of the year, the Indian crypto industry is trying to reinvigorate crypto activity.

According to Amanjot Malhotra, country manager-India, Bitay, a crypto platform, Bitcoin or Ethereum can also be a good form of gift as they are currently on the lower side of prices.

However, when it comes to gifting cryptoassets, there are certain aspects to keep in mind.

During the Union Budget 2022, it was announced that the gift of crypto will be taxable in the hands of the recipient.

“Based on the amendments in the Finance Bill 2022, the tax under the Income Tax Provisions (Section 56) also applies to the gift of cryptocurrency. Therefore, gifts of cryptocurrency, NFT or other virtual digital assets are taxable in the hands of the recipient if received from a non-relative for a value that exceeds ₹50,000,” Malhotra said.