Cryptovolume on Indian stock exchanges falls by more than 70% according to 1% TDS rule

Trading volume on crypto exchanges in India has hit a big hit of more than 70% since the start of the 1% TDS rule.

Crypto-trading volume on WazirX, ZebPay and CoinDCX falls by 70% or more

As reported by The Economic Times, after the start of the 1% TDS rule, trading volumes in India have plummeted.

TDS stands here for “tax deducted at source.” The 1% TDS rule published on July 1 requires the sender of any form of crypto transaction in India to pay 1% of the total amount as tax.

This is part of a series of controversial laws on the regulation of digital assets that were passed in the country earlier this year.

Related reading | Eyes On POW: The Biden administration will release a Bitcoin Mining report in a few weeks

Back in April, a law was passed stating that 30% of the income that comes from crypto transactions must be paid since the tax was published. Subsequently, trading volumes on the major Indian cryptocurrencies responded with a decline of around 40-80%. By the 12th of that month, the volume of stock exchanges had already reached a low of six months.

Now, the TDS rule that goes online has meant that trading volume has seen a fall of more than 70% on many exchanges between June 30 and July 3.

The Binance-owned WazirX, one of the most popular stock exchanges in the country, saw a sharp fall of around 82%. CoinDCX observed a decline of almost 70%, while ZebPay saw a decline of around 76%.

However, WazirX Vice President Rajagopal Menon argues that it is still too early to predict the effects of the rule and that things will be better understood by the second week of this month.

Related reading | Can potential gains from these cryptocurrencies help you achieve financial freedom? Gnox (GNOX), Elrond (EGLD) and VeChain (VET)

Menon adds, “there has been a decline in cross-industry trading as investors shift to hold, and there may be a further decline as traders see their capital locked up while trading on KYC-compliant Indian stock exchanges.”

According to The Economic Times, some industry insiders expect trading volume to continue to decline due to the current bear market.

BTC price

At the time of writing, Bitcoin’s price is floating around $ 19.7k, down 5% over the last seven days. Over the past month, the crypto has lost 33% in value.

The chart below shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have been moving sideways over the last few days | Source: BTCUSD on TradingView

In recent days, Bitcoin has not shown much movement. Besides a very short-term peak above $ 20k, the coin has largely consolidated around and above the $ 19k level.

Featured image from Ewan Kennedy on Unsplash.com, chart from TradingView.com