Crypto trading volumes in India have plunged significantly this year. The FTX meltdown has exacerbated the problem, hurting “the sentiment across crypto tokens.” Local crypto experts are not expecting a recovery in the near future “Unless something dramatic happens” in the upcoming Union Budget.
Indian Crypto Market ‘Dead’ Since April, Says Expert
Cryptocurrency trading volumes at major exchanges in India have plunged considerably this year. Since the collapse of crypto exchange FTX, major exchanges in India lost between 34th and 500th of trading volumes, Moneycontrol rumored Monday, citing knowledge from analysis firm Crebaco. However, the decline began long before the FTX implosion. one in all the most important crypto trading platforms in India, Wazirx, lost 97.99% of its trading volumes from the start of the year to Dec. 22.
Crebaco CEO Sidharth Sogani told the publication:
I don’t think a lot of this recent trading volume plunge was driven by FTX. The market in India has been dead since April 2022.
“I don’t expect any action or recovery for the sector in India within the next six months, till something major gets declared within the Union Budget,” he continued.
Wazirx’s vice president of selling, Rajagopal Menon, opined: “It all comes down to the removing / reducing the TDS (tax deducted at source) and capital gains while not setoff for losses. nobody is trading on Indian exchanges as a result of that.”
In this year’s Union Budget 2022, the Indian government obligatory a 30 minutes income tax on virtual digital assets, together with cryptocurrencies and non-fungible tokens (NFTs), and a {10th|a tenth} TDS on all transactions of 10,000 rupees ($121) or a lot of.
Menon stressed:
Unless something dramatic happens in the Budget this year, we don’t see a steady recovery in trading volumes anytime soon.
How FTX’s Collapse Impacts Indian Crypto Industry
“Indian users haven't been too badly plagued by FTX except for the sentiment. The negative sentiment round the sector got exaggerated by FTX,” a prime crypto exchange government told the publication. The person elaborated:
Indian investors, after TDS, have moved to Binance and not FTX because Binance had peer-to-peer (P2P) transactions, FTX doesn’t. If you have INR, the only foreign exchanges you can trade on are Binance and Kucoin.
Sogani equally explained that the FTX meltdown hurt “the sentiment across crypto tokens.” He added: “What came out afterward has pushed the crypto industry behind by a few years.”
Meanwhile, India still has not come up with a policy on crypto. The Indian government is reaching to discuss crypto regulations with the G20 countries in an attempt to determine a technology-driven regulative framework for crypto assets, the country’s finance minister previously revealed. the government recently updated parliament on the standing of its cryptocurrency bill.
India’s central bank, the reserve bank of India (RBI), has continued to push for the forbiddance of all cryptocurrencies, like bitcoin and ether. rbi Governor Shaktikanta Das recently same that future financial crisis can come from crypto if it's allowed to grow.
(Kevin Helms, Cointelegraph, 2022)