A week of crypto chaos

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Hi, this is Apoorva. I have covered the cryptocurrency industry for the past year or so, and for me the events of this week were a throwback to January 29, when the cryptocurrency bill was signed for the first time on the exam.

Panic sale. Concerned investors. Professionals considering relocating bases.

But today’s crypto industry is nothing like it was then. When it became clear earlier this year that the cryptocurrency bill will not be tabled in the budget session of parliament, retailer participation in this asset class skyrocketed – thanks, in part, to Elon Musk – and the trade flourished.

Until this month, the outlook for the industry looked bright from a regulatory perspective, as Union Finance Minister Nirmala Sitharaman pledged a ‘calibrated’ approach to cryptocurrency. But, on Tuesday night, the seemingly positive narrative reversed within seconds.

This week, a newsletter released by the Lok Sabha for the Cryptocurrency and Official Digital Currency Regulation Bill, 2021, spooked the fledgling industry. The bill, due to be tabled in the next winter session of parliament, the bulletin ominously states, aims to “… ban all private cryptocurrencies in India …”

The statement was enough to send thousands of retail investors, who jumped on the crypto bandwagon, into a panic sell mode. India has around 15-20 million retail investors who hold around Rs 6 lakh crore in crypto assets, according to the Blockchain and Crypto Assets Council (BACC), which is part of the Internet and Mobile Association of India (IAMAI ).

“Retail investors are scared, I get 50 to 60 messages a day just to talk about the market and a possible ban,” said a founder of a DeFi project who has been trading for more than five years, under the guise of anonymity. Bitcoin, Ethereum fell as much as 15% on local exchanges and Tether (USDT), the world’s largest stablecoin by market value, crashed and hit Rs 60 on the WazirX exchange while maintaining the peg 1: 1 with the dollar on international trade. The market was ripe for arbitrage, and savvy investors bought the downside.

If you’ve kept an eye on the industry, the broader feeling was that an outright ban was unlikely in India, and some form of regulation will be achieved, unless multiple reiterations by the country’s central bank. Reserve Bank of India (RBI) Governor Shaktikanta Das previously said cryptocurrency was a “major concern”.

Some leading investors say flashy and unbridled stock market ads are to blame for the current mess. So much so that Indian Prime Minister Narendra Modi declared “Advertisements should not mislead young people”.

“The exchanges brought this on their own,” said one of the investors.

CEOs of major exchanges, crypto commentators, politicians have exploited every possible channel – Twitter diplomacy, good ol ‘broadcast television, Twitter Spaces, you name it – to calm the nerves of retail investors.

Along with unprecedented retail participation, the past eight months in the crypto markets have also coincided with a boom in the developer community and in blockchain and crypto projects. Investors from outside India have started to sense the potential of the market – thanks to the success of Polygon and Instadapp and others – and the numbers have shown it. More than $ 500 million in venture capital was invested in the sector in October.

We have written about how the uncertain environment is driving some funds to suspend their investments or rethink their strategies, while other international venture capitalists are basing their hopes on regulations conducive to innovation.

When hints of a possible crypto ban emerge, developers and founders immediately start thinking about moving their bases to more user-friendly places like Singapore, Dubai or Abu Dhabi. Several large investors and project developers have already done so, and many more could follow suit.

Another founder said the uncertain environment seemed too risky for him.

And after? An outright ban on crypto in India is unlikely, as is its recognition as legal tender, ET reported earlier this month. India is considering a middle path on cryptocurrencies. And we’ll be here to report on how things are going for this nascent but booming industry.

Stay tuned to ETtech for more on this developing story next week.

OTHER MAJOR STORIES FROM OUR REPORTERS Mobikwik founders Bipin Preet Singh (left) and Upasana Taku

Mobikwik postpones IPO amid financial tech scrutiny: MobiKwik decided to delay its initial public offering (IPO) by 1,900 crore rupees, whose draft documents were filed in July, following disappointing market debut for Paytm.

“We have a one-year window from October to list and obviously we will when we think we’re going to be successful at an IPO,” Bipin co-founder Preet Singh told Reuters. “We don’t do it (IPO) based on bravado, based on aggressiveness and hope. You create maximum opportunities for success because you do it only once in the history of the company, so you want her to be successful. “

After Paytm listings, SoftBank takes a look at Juspay: SoftBank, one of Paytm’s biggest investors, is looking to diversify its holdings in the fast growing fintech industry in India now that the company has gone public.

SoftBank Vision Fund is set to lead a $ 100 million to $ 120 million funding round at Juspay, which would value the fintech company between $ 400 million and $ 500 million, sources told us. “SoftBank could invest around $ 50 million with other investors to complete their stake,” said a person familiar with the development.

If successful, it will be the largest fundraiser ever for Juspay, almost a decade earlier, which counts Accel and Wellington Management as investors. billion exposure to Paytm, in which it holds 16% of the capital.

D2C brands are moving to small towns in India: Small towns now account for 40-50% of sales of several premium direct-to-consumer (D2C) brands in grooming and beauty, food wellness, clothing, kitchenware and appliances with increased digital adoption and online shopping amid the pandemic.

Brands such as boAt, Bombay Shaving Company, Wonderchef, Kapiva, mCaffeine and Mamaearth expect a further increase in demand from small towns, driven by affordability and new consumers. D2C, where many brands are only in online, is one of the selected industries that has grown significantly since the Covid-19 outbreak as the pandemic forced people across the country to shop online. Udaan co-founders (left to right) Amod Malviya, Vaibhav Gupta and Sujeet Kumar.

Udaan to Face Meesho, DealShare in Grocery Industry: Udaan, a B2B e-commerce company, enters consumer-focused grocery industry through group or community buying model, similar to Pinduoduo in China .

While small retailers in Tier II-IV cities will be its “community leaders” delivering the orders, an individual consumer can also place an order for fresh produce and consumer goods, people briefed on the matter said. This will put Udaan in direct competition with SoftBank-backed Meesho as well as Tiger Global-backed DealShare, who increasingly focus on selling groceries in non-metro markets. Udaan entered space through a new platform called Price Company, people said.

BigBasket Enters Fast Delivery Segment: BigBasket will launch its express delivery service, BB Now, next month, offering 10-20 minute grocery delivery, joining the rush to trade fast with platforms like Grofers , Swiggy’s Instamart, Dunzo and Zepto.

The company will also feature all of its grocery offerings in its main BigBasket app, internally called the “BB Super App,” CEO Hari Menon told ET.BB Now, which is expected to launch around mid-December, will be done. part of BigBasket and the company has also started work to integrate its subscription essentials delivery service, BB Daily, with the main app, he said. a balance between staying nimble and being “alive with growth” as they move into the more traditional public market. This balance is not easy to find but it is what startups will have to work towards, writes Samidha Sharma.

How Creators and NFTs Power the Digital Renaissance: Much like the Medici of the Renaissance era, “superfans” will gladly spend thousands of rupees to own or support the work of their favorite creators, writes Aviral Bhatnagar, founder of ‘A Junior VC. Those who give creators the shovels of their careers will be part of the “designer economy”. The gold that creators will find with these shovels will most likely be in the form of NFT.

ETtech Deals Digest MORE TOP STORIES Amazon replaces Cloudtail for electronics retail: Salarpuria-Sattva Group, one of South India’s largest real estate developers, has incorporated Dawntech Electronics to take over all business consumer electronics from Cloudtail India, currently the biggest seller in Amazonian India.

Swiggy’s food delivery revenue increased 56% in the first half of fiscal 22, according to Prosus: Swiggy places 1.59 million orders per day, and its GMV for April-September 2021 has increased 69% year-over-year to $ 984 million thanks to higher average order values ​​compared to pre-pandemic levels and higher revenues, Prosus says.

Ola is still delaying deliveries of its electric scooters: Ola had until recently claimed that it would start deliveries of its electric scooters later in November. It was already a month behind on the delivery schedule she had indicated to buyers when reservations opened in mid-September.

MoS Electronics & IT Rajeev Chandrasekhar.

Equal Opportunities for All Internet Companies, said Rajeev Chandrasekhar: The government will provide equal opportunities according to the law to all Internet companies, whether foreign or Indian, and take a professional approach to deal with all outstanding issues , said the Union Minister of State. for IT and Electronics Rajeev Chandrasekhar.

Startups make share buybacks worth Rs 3,200 crore in 17 months: Nearly 40 Indian startups have bought back Rs 3,200 crore of shares since July 2020 from employees who had received stock purchase options. ‘actions, according to data compiled by ESOP Direct.

Indian tech startups step up campus hiring: Campus hiring will help startups train young talent and create more cohesion among them, amid record attrition rates in the tech industry in Canada wider. They also offer attractive salaries and growth opportunities for young people in a hyper-competitive talent market.

That’s all from us this week. Stay safe and get that jab.

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