Despite continued pressure from the government and central bank, Indian investors are showing growing confidence in cryptocurrencies. According to the analytical platform Chainalysis, the volume of investments in digital assets in the country has grown by 19,900 percent over the past year.
That is, investments have increased from $ 200 million to almost $ 40 billion. Accordingly, in fact, nothing stops local residents in the matter of cryptocurrency investments.
Recall that the legal status of cryptocurrencies in India has not been fully determined. The country’s central bank has threatened several times with a complete ban on all digital asset transactions, and in 2018, the Reserve Bank of India (RBI) banned local financial institutions from serving cryptocurrency companies. Nevertheless, it is still possible to invest in crypto startups in the country.
The local government again spoke about the desire to ban cryptocurrencies in the country in the spring. However, the point of view of officials regarding cryptocurrency has changed quite quickly.
In particular, at the end of May, representatives of the Reserve Bank of India made it clear that there was no need to set up bank clients against investments in blockchain assets by their employees. In fact, this could be regarded as an approval of the interaction with the coins.
A few days later, one of the largest banks in India called HDFC recommended that customers «ignore» previous warnings about the use of virtual currencies.
HDFC Bank Commentary on Cryptocurrencies
And to understand the strong desire of the citizens of India to get involved with cryptocurrencies, it is worth bringing the chart of the Indian rupee to the dollar. Over the past five years, the currency has depreciated significantly against the USD. And this is taking into account the depreciation of the dollar itself, which arose against the background of the massive release of the US currency during the development of the coronavirus.
Rupee to dollar chart
How much is invested in cryptocurrency
According to Chainalysis, young Indian investors under the age of 35 are most interested in Bitcoin. This fact was commented on by the co-founder of the local trading platform ZebPay, Sandeep Goenka. Here is a quote from an expert in which he shares his opinion on what is happening. The cue is from Decrypt.
It is much easier for them to invest in cryptocurrency than in gold because it is a very simple process. You go online, buy coins – and that’s it. There is no need to think about any other processes, as is the case in gold trading.
Indeed, investing in cryptocurrencies is easy enough. This is especially easy for users of large cryptocurrency exchanges who have verified their identity using documents. In this case, you can buy and sell coins directly using bank cards.
Growth in the volume of investments in crypto from Indian investors
Now let’s move on to the return on investment in BTC. India lags behind other regions in another Chainalysis report released earlier this month, ranking 18th out of the 25 largest countries with revenue of just $ 241 million. By comparison, the US topped the list with $ 4.1 billion, followed by China ($ 1.1 billion), Japan ($ 900 million), the United Kingdom ($ 800 million) and Russia ($ 600 million).
In general, it became known about the love of citizens for investing in cryptocurrencies even earlier. For example, in May, analysts reported that Bitcoin p2p trading volume in India has grown by more than 117 percent over the past year. We are talking about trading platforms that allow you to conduct transactions with cryptocurrency through direct interaction with users. An example of such an exchange is LocalBitcoins, the work of which we have discussed in a separate article.
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P2P trading volume in India
As you can see, even in the face of tough confrontation with the government, cryptocurrency lovers do not lose faith in digital assets. On the contrary, the more centralized authorities oppose the development of innovations, the more people try to “hide” their savings in decentralized alternative assets in the form of Bitcoin.
We believe that these statistics should be a wake-up call for the governments of different countries. As can be understood from the data, criticism of Bitcoin and other coins by officials not only does not stop citizens from investing in them, but also seems to provoke the country’s residents to do so. This means that the trust in the leaderships of the countries is not in the best shape, while the users themselves choose transparency and decentralization. If this trend continues, the harsh statements of officials against cryptocurrencies will eventually cease to affect coin rates altogether.
