Jana Ghana Mana! – According to data collected by Crebaco, an analysis firm for cryptocurrency, crypto trading volumes on major Indian stock exchanges decreased markedly since 1 April. That day, that new treasure on cryptocurrencies came into force in India. Volume on WazirX, the country’s largest stock exchange, fell 72%.
Deliquescent trading volumes in India
The volumes of four Indian exchanges were collected by analyzing data on CoinMarketCap and Nomics, another data firm. The data reveals a 72% drop on WazirX, 59% on ZebPay, 52% on CoinDCX and 41% on BitBns. Crebaco measured trading volume in US dollars.
India now applies a tax on 30% on profits from crypto transactions. In addition, the country does not allow set-off of gains in losses on other transactions. The most controversial provision will not take effect until July 1st. In fact, India will then impose a tax of 1% withheld at source (TDS).
“April 1st, 2nd and 3rd were holidays. Since then, volumes have continued to decline. I do not think it will come back (…) It created a new benchmark. It may sink lower or sideways, but it is unlikely to rise again. It is clear that the new tax has had a negative impact on the market. That is what the government must look at. And since there is no way to stop this (crypto), the government should embrace the technology. »
Sidharth Sogani, CEO of the analysis firm Crebaco
According to crypto lawyer Suril Desai, the drop in volumes could mean that the trade has moved elsewhere. He said so “The only trading volumes we get are from centralized exchanges. Off-chain exchanges which there is no trace of could happen”.
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Crypto exchanges want to be reassuring
The ZebPay exchange declined comments. In addition, the other exchanges did not immediately respond to requests for comment. Sathvik Vishwanath, co-founder and CEO of Unocoin, another Indian stock exchange, has meanwhile declared that the new tax law affected the market.
“People earn less than Rs 1,000,000 (about $ 13,000) per year is affected by a 30% fixed income tax on crypto. 1% TDS affects market makers and liquidity providers. Both are necessary for a better crypto ecosystem in India. »
Sathvik Vishwanath, co-founder and CEO of the Indian stock exchange Unocoin
Anton Gulin, regional manager of the crypto exchange AAX, said the decline in volume should reverse in the short term.
“The AAX exchange has also seen an influx of active Indian users over the last few weeks. However, I think the tax rate could be revised to attract more taxpayers as this is the ultimate goal of any government.”
Anton Gulin, regional manager of the crypto exchange AAX
Johnny Lyu, CEO of the trading platform KuCoin, said some beginners are less likely to invest in crypto in the short term.
However, KuCoin did not detect any outflow according to internal data. This can be explained by the higher degree of crypto-nativeness among our users (…) The new law will affect the mood and behavior of the market in the short term, but it will be difficult to block the long-term adoption of crypto. “
Johnny Lyu, CEO of the KuCoin trading platform
Although the recent regulation of cryptocurrencies in India has obviously caused trading volumes to fall, this should only be temporary. In fact, these new laws at least have the benefit of define a clear framework for cryptocurrencies. As a result, many investors were able to put their suitcases in the country. At least that is the case with the exchange Coinbase, which decided to invest a million dollars in the country.
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