Bitcoin has made headlines again, hitting an all-time high of $89,915 with a year-to-date gain of around 105%, pushing its total market cap to $1.74 trillion . This surge has fueled trading activity on Indian crypto exchanges, which previously saw volumes drop by 90% due to a 1% Tax Deducted at Source (TDS) and a decline in Bitcoin’s value.
“We’re seeing a major uptick in trading,” says Mridul Gupta, Founding Partner at CoinDCX. "Our 24-hour trading volume is now $21 million, with a peak of $36.5 million on November 10, up from just $5.8 million before November 6. This is over five times higher than the same period last year when volumes were around $4.35 million."
With this rise in volume, Indian crypto exchanges are also seeing a boost in revenue, recovering from the dip caused by TDS and market fluctuations. Vikram Subburaj, Founder of Giottus Crypto Exchange said, “We’ve seen a 4x increase in revenue and volumes compared to when they had dropped by 90%. Our daily volumes are now at $2 million compared to the previous lows of $500K earlier.”
Back in 2021, crypto exchanges in India thrived with record trading volumes, and their founders gained prominence. However, after a 30% tax on crypto gains and a 1% TDS came into effect on February 1, 2022, trading volumes dropped significantly. The market downturn was further exacerbated by the collapse of major crypto platforms like FTX and rising interest rates.
The current surge in crypto is driven by Donald Trump winning elections in the US which could mean favourable regulatory changes given his pro-crypto approach, Moreover, other factors like the approval of ETFs in other markets, the Bitcoin halving event have had driven the rally in the past. With signs of recovery. Balaji Srihari, Business Head at CoinSwitch, notes, “We’re seeing a significant surge. Our peak hourly traffic has spiked nearly 7x, new user signups are up 4x from last week, and trading volume has increased by 9x. This reflects renewed interest and participation in crypto.”
Despite the upswing, Indian exchanges still face competition from international platforms, as many investors continue to trade abroad to avoid TDS. “While tax policies have impacted Indian exchanges, many investors have shifted to global platforms,” says Gupta. “However, with new guidelines from the Financial Intelligence Unit (FIU) on foreign exchange registration in India, we’re seeing a trend of investors returning to domestic exchanges.”
While opinion about crypto has always been divided, crypto trading declined in India only after heavy taxes were imposed. With transaction volumes again gaining traction at crypto exchanges, there is a need to take caution.
Former State Bank of India chairman Arundhati Bhattacharya, who is now Chairperson and CEO of Salesforce India had told Business Today. "There are a few things [about cryptocurrencies] that I don't believe in. One is the fact that their value is not determined by any particular authority. It just goes up and down. You cannot say whether it's going to be ₹10,000 today or ₹100 or ₹10 tomorrow. So, to that extent, it is just like any other commodity," she told BT in an earlier interaction. The second thing, she said, is that the security regarding crypto is another concern. "You don't know whether somebody can hack in. You don't know whether the people who are supplying it [will] simply go away in a puff of smoke."
The legendary Warren Buffett. The Oracle of Omaha once famously said at Berkshire Hathaway's annual meeting in 2022 that if someone offered him all the Bitcoin in the world for $25, "I wouldn't take it, because what would I do with it?"