Indian cryptocurrency market was evaluated at around US$150.214 million for the year 2020.
The market has seen steady positive growth since it was first launched in India. A cryptocurrency can be a digital asset that can also be used as a medium of exchange digitally; wherein all the transactions are registered on a digital ledger-like system called a blockchain. Technology has seen this level of adoption amongst the population. It gives more transparency to its users as no transaction, once registered on the blockchain, can be edited or changed by anyone, not even by the administrator. This makes the transaction process of cryptocurrencies a lot more transparent and secure. In the initial stages of introducing this technology in the country, the growth was a lot slower as the customers, and the users weren’t aware of it. However, as awareness about cryptocurrency spread across the country, the market started to witness a gradual increase over the years. It was fuelled further when the ban on cryptocurrency trading was lifted by the Supreme Court of India in March 2020. In light of these government relaxations, the market saw major players giving out services regarding cryptocurrency. For example, Tata Consultancy Services (TCS) launched a product called Quartz Smart Solution for crypto for the banking institutions that are dealing in cryptocurrencies. Though the Indian market comprises a market share of less than 2% in the global picture, the market is set to increase at a significant growth rate owing to the supreme court verdict and the increasing awareness of the benefits of cryptocurrencies amongst the customers. The number of cryptocurrency users in India witnessed significant growth, with 1.7 million in India as of March 2020.
The Indian cryptocurrency market has been segmented on the basis, by type (Bitcoin, Ethereum, Ripple, Dashcoin, Litecoin, Bitcoin cash, others), by process (mining, transaction), by end-user ( banking, real estate, stock market & virtual currency).
The Market Picked Up Pace After The Ban Was Lifted
The Reserve Bank of India imposed a ban on the trading of cryptocurrencies in India on 6th April 2018. After two full years, the supreme court overruled the ban calling it unconstitutional. Since the lifting of the ban, the market has seen a boost in the number of users of cryptocurrency and also the amount of money traded using that. Several companies started offering solutions for easier currency trading, like TCS’s Quartz Solution for Crypto. A Mumbai-named cryptocurrency exchanger, WazirX, recorded rapid growth in the amount of cryptocurrency trading in India. Even the month-to-month percentage of the currency also went up significantly, from 270% in April last year to 400% in March this year.
Bitcoin Holds The Largest Market Share
Bitcoin was first introduced by Satoshi Nakamoto in 2009. It took a little while since then to hit the Indian market. Cryptocurrency made its subtle entry into the Indian market in 2012, but it was not until 2013 that bitcoin started gaining some popularity. Being the first-ever cryptocurrency and the oldest one, it has the maximum number of users in the country. A significant percentage of the population understood the currency and were accustomed to using it for a more extended period. Furthermore, it took other cryptocurrencies a little while to enter the Indian market as it was dominated by bitcoin.
STOCK MARKET AND VIRTUAL CURRENCY AS END-USERS WILL HOLD THE LARGEST MARKET SHARE
The current value of 1 Bitcoin in Indian rupees is approximately 13 Lakhs rupees. Since the currency's launch, Indian customers have experienced more profit in dealing with the currency in the stock market and keeping it as a virtual currency. With the prices of cryptocurrencies experiencing dynamic and rapid price changes, the customers have found it more profitable on this end. Thus, the stock market and virtual currency are expected to hold the largest market share in the forecast period.
The Covid-19 pandemic has negatively impacted the overall market growth as the prices had done down in the first quarter of the year. However, the cryptocurrency exchanges in India kept on expanding their businesses and their figures which has led to the opening of new bitcoin exchanges in India. Furthermore, companies like CoinSwitchKuber and Coinbase are expanding their business in the country which is projected to have a positive impact on the overall market growth. Coinbase expands its wallet usability with Binance’s BNB chain and Avalanche.
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