The month-over-month (MoM) increase in cryptocurrency trading volumes across the leading Indian exchanges from February to March 25 was over 207 percent. This increase in trading activity was largely due to the recent continuation of the Bitcoin price boom.
Based on data from the cryptocurrency trading company CREBACO Global, the top three exchanges—WazirX, CoinDCX, and Zebpay—have surpassed $189.91 million in trading volume at the end of February to a total of over $584 million in March.
Trade volumes in earlier months
In January and February, trade volumes on the cryptocurrency investing site CoinSwitch grew by 36% MoM; but, by March, they had surged by more than 200%.
Industry insiders, however, pointed out that these figures are still far from the fervour of the previous bull run in 2021, when FTX’s collapse, high taxes, as well as regulatory worries caused cryptocurrency trading volumes to fall globally.
High net worth individuals (HNIs) and institutions won’t see a widespread rebound in their investments as long as India’s tax laws remain unfavorable, according to CREBACO founder and CEO Sidharth Sogani.
In 2022, the earnings or revenue from transactions involving virtual digital assets (VDAs) and cryptocurrencies were subject to a thirty percent tax levied by the Indian government. Furthermore, a 1% TDS (tax deducted at source) fee is applied to each transaction that exceeds Rs 10,000.
Why is there an increase in trading volumes?
The primary reason for the increase in trading volumes is that institutional investments began to flow into the worldwide market through Bitcoin Exchange-Traded Funds (ETFs), which were approved by the US Securities and Exchange Commission (SEC) in January. This led to Bitcoin values reaching all-time highs of $73,000.
Exchanges such as CoinDCX experienced a surge in the number of new users joining the platform, in addition to the increase in trading volumes. The blocking of multiple offshore exchanges in India in January, according to Mridul Gupta, COO of CoinDCX, is partly to blame for this spike. These transactions did not register with the Financial Intelligence Unit-India (FIU-IND) and did not adhere to local money laundering laws.
Conclusion
Although trading activity has increased, cryptocurrency entrepreneurs all concur that early indications of a full-fledged bull run in India are still lacking.
Responses to WazirX are conflicting. Like gold, a large number of CoinDCX users also save their Bitcoin as a long-term investment, according to Gupta.
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