As cryptocurrency adoption races ahead, experts predict more investors to jump onto the crypto bandwagon, with many numbers from Tier 2-3 cities.
India has a robust crypto sector despite its late entry, and the recent indications by the Government of India regarding a ‘middle path’ for regulating this sector has given Indian crypto leaders encouragement.
Read more: Crypto activity pouring wealth into the ecosystem, innovating to ease new investors
The Indian cryptocurrency market grew from US$923 million in April 2020 to a staggering US$6.6 billion in May 2021, which is an average of over 50% monthly growth. With over 1.5 crore Indians invested in crypto already, the Indian market is positioned to significantly grow. Among 154 nations, India ranks second in cryptocurrency adoption, according to a report by Chainalysis.
Ashish Anand, CEO and Co-founder of Brú.Finance, spoke about the record rise the market witnessed recently and it signifies for the budding Indian crypto community.
“Indian crypto market is one of the largest crypto markets around the globe, both in absolute and relative terms. This market has seen an influx of new venture capital, new exchanges and more so new trading/speculative capital in the last year of the crypto bull market,” he said.
As the market moves higher, we expect more and more people, even the fence-sitters or traditionally low-risk investors to allocate a portion of their investment portfolio to crypto assets. We will also see more demand coming from tier 2 and tier 3 cities
Anand also said that more and more Indian investors are likely to get onto the crypto bandwagon, even from smaller towns.
“As the market moves higher, we expect more and more people, even the fence-sitters or traditionally low-risk investors to allocate a portion of their investment portfolio to crypto assets,” he said.
“We will also see more demand coming from tier 2 and tier 3 cities,” he added.
In August, cryptocurrency exchange WazirX reported a 2,648% rise in users, the source being tier-2, 3 cities. According to the company, small towns, such as Ahmedabad, Lucknow, Patna, Ranchi, Imphal, and Mohali, have accounted for nearly 55% of total user sign-ups on the platform in 2021.
Also, women from tier-2, 3 cities account for 65% of the total signups by women in India.
Advice for the New Investor
Caution is still in the air because of the volatile and complex nature of cryptocurrencies. Anand advises how to go about it.
As the market is expanding, it is better to invest most of your crypto capital in coins with proven networks, solid fundamentals, and all-weather demands like Bitcoin, Ethereum etc. that will fare well even in a bear market. It would also be beneficial for the adventurous speculators who like to bet on memecoins, NFTs, etc. to keep the exposure to these low
“As the market is expanding, it is better to invest most of your crypto capital in coins with proven networks, solid fundamentals, and all-weather demands like Bitcoin, Ethereum etc. that will fare well even in a bear market. It would also be beneficial for the adventurous speculators who like to bet on memecoins, NFTs, etc. to keep the exposure to these low,” he says.
“Given the secular bull market Bitcoin has showcased to be in since the last 13 years, no time frame is ‘too late’ for those looking to create generational wealth over a period of years, thus, those who have not yet explored this sector should start soon as it is destined for long-term expansion,” he adds.
A Middle Path for Crypto
India has been mulling over adopting a middle path on cryptocurrencies, while attempting to finalise legislation on digital assets to be introduced in the upcoming winter session of Parliament.
Vikas Ahuja, CEO of CrossTower India, said, “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is currently being reviewed and is slated for the next session of the Indian parliament. With India being the world’s largest democracy, this bill will play an important role in shaping the future of cryptocurrencies for the Indian community.”
In the last couple of years, India has seen a revolution in crypto-investing. The new generation of investors in India has welcomed cryptocurrencies as a tool for financial freedom. With advancements in technology, crypto markets have proven a key driver in the democratisation of wealth
The Reserve bank of India (RBI) is set to launch a central bank digital currency (CBDC) by December this year, marking a historic first for the country.
Kapil Rathi, Co-founder and CEO of CrossTower said, “In the last couple of years, India has seen a revolution in crypto-investing. The new generation of investors in India has welcomed cryptocurrencies as a tool for financial freedom. With advancements in technology, crypto markets have proven a key driver in the democratisation of wealth.”
Global Crypto Adoption
Cryptocurrency adoption has been experiencing a high in the past few months globally. Since October, the sector has been pumped up on crypto adoption news by banks, NFT growth on virtual gaming platforms, the bitcoin launch of US ETFs, and investors looking to invest in a diverse area.
In September, El Salvador officially adopted bitcoin as legal tender. According to reports, countries like Panama, China, the US, and the UK are also looking to launch their own cryptocurrencies.
According to Reuters, a top US bank regulator said officials are trying to clear the path for banks and their clients to hold cryptocurrencies, so they have more control over the asset.
Given the secular bull market Bitcoin has showcased to be in since the last 13 years, no time frame is ‘too late’ for those looking to create generational wealth over a period of years, thus, those who have not yet explored this sector should start soon as it is destined for long-term expansion
Australia’s largest bank, Commonwealth Bank of Australia, declared it will be the country’s first to offer retail clients crypto services.
Smaller wins, such as Kroger, the American grocery retailer will begin accepting Bitcoin Cash from December, have also happened.
Read more: FinTech innovation led adaption this quarter has been encouraging overall growth
Cryptocurrency value has been going up this year. Bitcoin has shot up nearly 117% this year, while ether showed a six-fold rise. Recently, Ether, the world’s second-largest cryptocurrency, has been celebrating with an all-time high, gaining up to bitcoin’s popularity, reaching as high as US$4,670.81 last week.
Bitcoin too touched a record high of US$67,016.5 in October, while tokens on the base layer of blockchain networks, called Layer 1 networks, also showed spike.
