India may have a contentious relationship with the crypto space, but investments continue to pour into the country’s digital coin sector.
In 2019, the largest cryptocurrency exchange Binance acquired the Indian crypto exchange platform WazirX. In 2018, India’s largest cryptocurrency exchange, CoinDCX, also secured funding from crypto trading platforms BitMEX and Coinbase, despite the Reserve Bank of India (RBI) ordering financial institutions to cut off their ties with crypto-related businesses.
The trend will likely continue, given that a large chunk of the nation’s population belongs to the demographics of individuals who are more likely to invest in cryptocurrencies. Harish BV, the co-founder of Indian Bitcoin processor Unocoin, told Quartz in an interview that the median age of Indians is between 28 and 29 years.
“There is an increasing trend of foreign cryptocurrency exchanges investing in Indian cryptocurrency exchanges. It’s because India has a population of 1.39 billion that is predominantly young which is seen as tech-savvy and more adaptable to crypto saving.”
In March 2020, India’s Supreme Court struck down the RBI circular that restricted crypto dealings. Still, the government now considers proposing a new law that will ban cryptocurrencies and fine those who hold and trade digital assets.
If the plan pushes through, cryptocurrency trading, possession, issuance, mining, and transferring will be criminalized in India.
Huge growth potential for India’s crypto market
Despite the uncertainties surrounding digital assets, millions continue to bet on cryptocurrencies. Experts think that there is a vast untapped market for the crypto space.
According to GlobalData senior analyst Nicklas Nilsson, exchanges like WazirX estimate that between 7 and 8 million investors in India hold over $1 billion in crypto investments. Industry estimates also peg the potential investor base upwards of 100 million.
Nilsson added that large crypto exchanges such as Coinbase and Binance are betting in the Indian crypto market because of its huge growth potential. He says that these companies have massive cash reserves that they are now using to expand into newer markets.