[ad_1]
MUMBAI: As an asset class, cryptocurrencies have seen an exponential increase in interest from global investors over the past year and peaked in April of this year. In India, too, a similar trend was visible with crypto exchanges seeing impressive user additions and a sustained increase in daily trading volumes.
Over the past two or three weeks, however, volumes on Indian exchanges have fallen with their global peers in a bearish climate in the crypto market.
There has been a deluge of news that has influenced the increased price volatility in most cryptocurrencies, which has deterred many crypto traders from taking additional risks. Additionally, with most of the larger cryptocurrencies such as Bitcoin and Ether having significantly corrected their peak prices, investors have taken a cautious stance, which has an additional impact on transaction volumes, ”he said. said Sumit Gupta, co-founder and CEO of CoinDCX.
The daily trading volume of the exchanges fell to less than $ 10 million this week, from a high of $ 76 million in May, according to data available with CoinGecko.
View full picture
Trade volume
In the past, even though there was a sharp drop in prices, there was an increase in trading, as many investors leaned into buying value. However, the volume has not increased despite a small rally in crypto prices recently. Should we worry investors?
India’s largest cryptocurrency exchange, WazirX, registered a trade volume of $ 114 million on Thursday. It had reached a daily trading volume of $ 392 million as of April 17, 2021.
June’s volume is still much higher than what we were doing in April. It was despite all the banking problems. The crypto market has been growing since last year. I think the market will remain in a consolidation phase during the quarter, and from the middle of the next quarter, we should see market movement take place.
There is still a lot of buying going on and HNIs are investing a lot, doing their research and setting up their accounts, ”said Siddharth Menon, co-founder and COO of WazirX, which had a trading volume of $ 6.4 billion in May.
Gupta adds: With the reduction in volatility and increased investor awareness of the long-term outlook for crypto assets, there will be a stronger rebound in trading volumes going forward. “
Globally, there has been increasing adoption by developers and the investment community. The main reason is the large number of projects developed using blockchain technology which are now reaching out to many industries and leading to significant operational improvements. The fear of missing out (FOMO) has also pushed retail investors towards this new asset class.
However, Fear, Uncertainty and Doubt (FUD) has pervaded the market in recent weeks amid costly assessments, regulatory crackdown in some countries, and concerns about the environmental impact of the world’s largest crypto token. world, bitcoin.
Bitcoin prices have fallen more than 45% from its all-time high of $ 64,804.72 reached on April 14, while Ether is down 47% from its all-time high of 4,356, $ 99 reached on May 12.
FOMO and FUD, both are part of any market, be it the stocks, crypto or commodities market. We are in a phase of consolidation and people are looking for a clear direction of price movement. Depending on this direction, FOMO or FUD will play. However, we still recommend investing in crypto assets using the average long-term rupee costs to get rid of short-term volatility and get a better average market entry price, ”Avinash Shekhar said. , co-CEO of ZebPay.
According to Shekhar, any kind of development in the crypto space, ranging from network upgrades to more use cases, will drive the market.
As far as India is concerned, measures that would further stimulate the crypto market include formal recognition of cryptocurrencies as an asset and more clarity in terms of tax policies applicable to both investors and exchanges ” , Gupta said.
According to experts, people looking for quick cash may find this market a little shaky, but investors who are there for the long term are still quite strong in the market.
Subscribe to mint newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint. Download our app now !!
[ad_2]
picture credit