Cryptocurrency adoption in India is fast gaining ground. Chainalysis, a blockchain analysis company, estimated that India’s total cryptocurrency investment grew from $923 million to nearly $6.6 billion roughly over the past year.
The firm also estimated that 15 million Indians are exposed to cryptocurrency. This growth represents a 612% increase in just one year. It would seem that Bitcoin being tagged as “Digital Gold” is winning the hearts of Indians, where households own more than 25,000 tonnes of gold, ranking the nation as one of the world’s largest holders of the precious metal.
According to a Bloomberg report, cryptocurrency investments increased around mid-2020, just after the Indian Supreme Court’s March 2020 decision to overturn the Reserve Bank of India’s ban on financial institutions providing banking services to firms operating with digital assets, before going parabolic as the markets surged into new all-time highs towards the end of the fourth quarter.
The latest World Gold Council data indicated Indian adults under age 34 have less appetite for gold than older consumers which may be the reason for the surge in the investment into cryptocurrency as an alternative to Gold investment.
However, even after the overturn by the supreme court, it has not been entirely smooth sailing for India’s cryptocurrency sector, with lawmakers frequently threatening new legislation aimed at prohibiting cryptocurrency assets.
On the issue of regulatory concerns, Richi Sood, a 32-year-old entrepreneur, stated: “I am flying blind. I have a risk-taking appetite, so I’m willing to take a risk of a ban.”
The total number of investors investing in cryptocurrencies in India are now more than 15 million. Compared to the U.S, which has 23 million investors and the U.K with just 2.3 million investors, the Indian cryptocurrency market is looking to be a major player in the market with the majority of transactions coming from Indians in the age bracket between 18 and 35 years.
What they are saying
Speaking on why there is so much demand from Indians, Sandeep Goenka, co-founder of ZebPay, a cryptocurrency exchange stated:
“They find it far easier to invest in crypto than gold because the process is very simple. You go online, you can buy crypto, you don’t have to verify it, unlike gold.”
Goenka has already got contingency plans in place to move his trading to an offshore Singapore bank account if a ban was to be introduced.
Richi Sood who was interviewed by Bloomberg mentioned that she invested over 1 million rupees ($13,400) into Bitcoin, Dogecoin and Ether. She cashed out part of her position when Bitcoin smashed through $50,000 in February and bought back in after the recent tumble, allowing her to fund the overseas expansion of her education startup Study Mate India.
“I’d rather put my money in crypto than gold. Crypto is more transparent than gold or property and returns are more in a short period of time,” Richi said.
Keneth Alvares, an independent digital marketer, stated: “I think over time everyone is going to adopt it in every country. Right now the whole thing is scary with regulation but it doesn’t worry me because I’m not planning to remove anything for now.” He mentioned that he has invested more than $1,300 in cryptocurrency so far.
