When we think of investments, words like buying property, gold, mutual funds and stocks pop out at us. For the longest time in India, making investments was looked at in a traditional way, with long term security and safety being paramount. This however has been disrupted in the past few years, thanks to the cryptocurrency market. This new asset class is notorious for its ups and downs but somehow that is what makes it lucrative for the newer generations. Providing massive returns with very little investment, cryptocurrencies hold the power to destabilize the preexisting norms of investing. With out of the box thinking and technological advancements, this market has a value of $2.12 Trillion, with its daily trading volume exceeding almost $100 Billion, making everyone want in on the action.
While this sounds tempting, you need to have a greater understanding and more knowledge about the crypto world before you start investing. So let’s take a look.
What Is Cryptocurreny Built On
Most cryptocurrencies like Bitcoin and Ethereum (Ethereum to INR) are built and supported by a technology known as ‘Blockchain’. A significant invention of recent years, Blockchain keeps a record of all transactions (called a ledger) and helps in ‘mining’ more coins based on established mathematical principles.
While this seems to be a simple operation, blockchain allows users to perform both without the need for a trusted middleman, implying that there is no central authority incharge and everything takes place on a digital ledger.
Whether or not people trust this technology is a different matter, it has become a worldwide phenomena lately. To understand how this has impacted Indian markets, where it plans to go in the future, let’s take a closer look at it.
Cryptocurrency And Its Past In India
Cryptocurrency made its appearance in India for the first time in 2009, in the form of bitcoin. Since then it has gained a lot of popularity and has paved the way for more such coins like Ripple (ripple to INR) and Ethereum to make a place in the market.
According to estimates, India has 15 to 20 million crypto investors, with total crypto assets of roughly 41 thousand crore rupees. Internet usage growth, the country’s thriving digital economy, and computer-savvy millennials offering the ideal customer market for cryptocurrencies are a few of the reasons for this boom. Massive transaction volumes on peer-to-peer (P2P) systems are also contributing to the rise of cryptocurrencies which can also be transmitted across borders without the involvement of any third-party entities.
Needless to say, most people consider them as a viable alternative to conventional investment methods such as stock exchanges and mutual funds, with the potential for future value growth.
Future Of Cryptocurrency In India
Research statistics show that among all crypto traders in India, 66% are young millennials under the age of 35, with the majority of them being from tier 2 and tier 3 cities. Owing to the distrust towards banks and financial institutions and availability of digital technologies, the crypto market is slowly, but steadily gaining traction in India.
Peer to peer networks have aided in the widespread acceptance of cryptocurrencies among the tech-savvy youth. The growing acceptability of cryptocurrencies in the mainstream will also stimulate future penetration into more esoteric areas of the society.
The future of cryptocurrencies in India seems to be on a bright path as Bitcoin can now be converted into cash in India. The government has understood the impact this market could have on the Indian economy as well and has responded by bringing in tax laws and regulations and making it a separate asset class.
Although that makes it slightly more legitimate, cryptos still haven’t been accepted by the Indian government as a legal form of payment and the gains from cryptocurrency will be taxed.
With more and more Indians investing in cryptocurrencies and the involvement of the Indian government, the future of cryptocurrencies in India seems to be promising. With India being a developing nation, more laws can be implemented when it comes to cryptocurrencies.