Crypto trading, user registrations see jump in India on stable bitcoin

Bitcoin prices have consolidated within an increasingly narrow range, even as global equity and bond markets continued to tread the challenging terrain with mounting evidence of stress developing in sovereign debt and currency markets this week.

On a 30-day basis, bitcoin (BTC) is up around 2%. In the traditional asset markets, the S&P 500 in the US is down 3%, while in India the BSE Sensex is down more than 1% on a monthly basis. These markets have seen a decent peak in the last few days. In the foreign exchange market, the rupee (INR) fell close to 3% in September.

Shivam Thakral, CEO, BuyUcoin, said that the BTC-INR trading pair is gaining a lot of traction from seasoned investors on the platform.

“The main reason behind this trend is falling rupee and underperforming stock market, pushing investors towards digital assets. The high inflation results in rapid wealth depletion and investors look to digital assets like bitcoin as a store of value to prevent inflationary damage to their wealth,” said Thakral.

BuyUcoin has seen a 40-45% increase in the BTC-INR trading pair and a 30% jump in new user registrations in the second quarter of FY2023.

Another crypto exchange Unocoin is witnessing a similar trend.

“Compared to August, we have seen September as a better month. User registrations per day are up 20% and volumes are up 40%,” said Sathvik Vishwanath, Co-Founder and CEO of Unocoin.

This surge in crypto activity in India has come as a respite for exchanges, which are battling a crash in trading volume due to strict crypto taxation norms and crypto winters.

In the global markets, bitcoin and ethereum have plunged around 70% from their respective records.

The Bitcoin trading number in India currently varies from its global counterpart. Currently, most risk asset prices and volumes are mainly driven by global macro liquidity events.

However, in the Indian crypto market, the price volatility of INR-USD also affects the markets, especially the USDT-INR pair.

“Overall, the Indian market has a premium of around 5% due to lower liquidity across exchanges for various reasons. Additionally, the rupee has lost around 2% against the US dollar in the last two weeks, compounding this premium and hence a rise in trading activity, says Mahin Gupta, founder of Liminal, a digital wallet platform.

However, some experts are wary of the rise in crypto activity in India.

According to Sidharth Sogani, founder and CEO of CREBACO Global, a research, assessment and intelligence company focused on blockchain and cryptocurrencies, crypto trading and user registrations may have seen some increase, but it has been on a low base.

Driven by a 30% flat tax on capital gains from crypto-assets and a 1% tax deducted at source on every crypto transaction, as well as up to an 80% drop in digital asset prices, trading activity on crypto exchanges has fallen 80-90% since April 1, 2022.

However, Sogani sees sentiment in the crypto market improving, especially bitcoin in the near future.

The expert sees bitcoin remaining stable despite challenging inflation and reaching the $30,000 level in the next two to three months.

“Fundamentally, bitcoin is very strong. There are a few core parameters that work in its favor. The transaction fee is at an all-time low, the transaction speed is good, and the difficulty and hash rate are at an all-time high. The number of wallets that have bitcoin is also going up. When the basic is good and the price doesn’t do much, it’s a very good sign,” said Sogani.