In the past year, Indian investors have sunk $38.8 billion into cryptocurrencies amid the country’s unstable crypto regulatory landscape.
India has been on the news on multiple occasions with regards to a crackdown on cryptocurrencies. In early February, there were reports that the Indian government was pushing a bill to restrict crypto transactions. This was quickly followed by rumors that the government had ban cryptocurrencies, giving investors six months to liquidate their assets. However, the story changed again in March, with reports claiming that the country would move forward with a bill that criminalizes cryptocurrencies. Two months later, the National Payments Corporation of India (NPCI) clarified that the decision to restrict cryptocurrency transactions has been left with individual banks.
In an interesting plot twist, the narrative changed yet again in mid-June, with reports suggesting that the government is set to drop its anti-Bitcoin agenda and classify cryptocurrencies as an alternative asset class.
Amid the regulatory back and forth over the past year, Indian investors have remained unperturbed by the persistent threats from regulators. Nationwide investments in cryptocurrencies have increased by 19,900% over the past year.
According to data from blockchain analytics firm Chainalysis, Indian crypto investments spiked in mid-2020 and went parabolic as several cryptocurrencies moved towards new all-time high values at the end of the fourth quarter.
According to the data that was reported by Bloomberg on Monday, Chainalysis estimates that the total crypto investment from India grew from a meager $200 million to $40 billion within a year. Chainalysis further estimates that about 15 million Indians were exposed to the cryptocurrency market.
Commenting on the development, Sandeep Goenka, the co-founder of local exchange ZebPay, highlighted the growing demand for cryptocurrencies from young Indians aged 18 to 35. He told Bloomberg:
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.
Similarly, 32-year-old local entrepreneur, Richi Sood, is one of those who have dumped gold for cryptocurrencies. Since December, she has invested more than $13,000 in cryptos. She said:
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.