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MELTING DOWN

The global crash has come as a double whammy for India’s crypto industry

REUTERS/Dado Ruvic/File Photo
Crashing down.
  • Mimansa Verma
By Mimansa Verma

Reporter based in New Delhi

Published

The global cryptocurrency crash has come at a time when India’s crypto industry is already bogged down by other factors.

On June 18, Bitcoin’s price dropped to $18,000 while Ethereum dropped below $1,000. Even globally, the market cap of crypto markets shrunk to about $950 billion now, from $2.97 trillion, seen in November 2021. Global exchanges Coinbase has laid off 18% of its workforce, including those in India.

This disastrous streak in the crypto market has been guided by soaring inflation, along with increasing interest rates by global central banks, according to Rajagopalan Menon, vice-president of India’s major cryptocurrency trading platform WazirX.

The Indian ecosystem has witnessed a 90% drop in trade volumes since March. Besides the global headwinds, India’s tax rules and inadequate banking channels have also played a treacherous role, according to Menon.

Experts like him believe that a weak risk appetite due to macroeconomic stress globally will now keep India’s stakeholders on edge in the near term.

Companies, meanwhile, are reducing expenditure on marketing and exploring new revenue streams to beat the global meltdown. This increases the need to regulate India’s crypto industry.

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