Bitcoin price is consolidating within an increasingly narrow range, even as global equity and bond markets continued to tread challenging ground this week with mounting evidence of evolving tensions in sovereign debt and money markets.
On a 30-day basis, Bitcoin (BTC) is up about 2%. Among traditional asset markets, the S&P 500 is down 3% in the US, while in India, the BSE Sensex is down over 1% on a month-to-month basis. These markets have seen a good rally in the last few days. In the forex market, the rupee (INR) depreciated close to 3% in September.
BuyUcoin CEO Shivam Thakral said that the BTC-INR trading pair is getting a lot of traction from experienced investors on the platform.
“The main reason behind this trend is the depreciating rupee and the poor performance of the stock market, which is pushing investors towards digital assets. High inflation is resulting in rapid depreciation of wealth and investors are increasingly looking to digital assets like bitcoin as a store of value to hedge the damage of inflation to their money,” Thakral said.
BuyUcoin has seen a 40-45% increase in the BTC-INR trading pair and a 30% increase in new user signups in the second quarter of FY 2023.
Another crypto exchange Unocoin is witnessing a similar trend.
“Compared to August, we have seen a better month in September. “There has been a 20% increase in user registrations per day and a 40% increase in volume,” said Satwik Viswanath, co-founder and CEO of Unocoin.
This spike in crypto activity in India has come as a relief to exchanges, which are battling a crash in trading volumes due to stringent crypto taxation norms and crypto winter.
In global markets, Bitcoin and Ethereum are down nearly 70% from their all-time highs.
Bitcoin trading numbers in India are currently different from their global counterpart. Currently, the prices and volumes of most risk assets are largely driven by global macro liquidity events.
However, in the Indian crypto market, INR-USD price volatility also affects the markets, especially the USDT-INR pair.
“Generally, there is a premium of around 5% in the Indian market due to low liquidity in exchanges due to various reasons. Moreover, the rupee has depreciated around 2% against the US dollar in the last two weeks, increasing it’s premium and hence trading activity, said Mahin Gupta, founder, Liminal, a digital wallet infrastructure platform. .
However, some experts are cautious about the uptick in crypto activity in India.
According to Siddharth Sogni, founder and CEO of CREBACO Global, a research, ratings and intelligence company focusing on blockchain and cryptocurrencies, crypto trading and user signups may see some growth, but on a low basis.
Trading activity on crypto exchanges has fallen 80-90%, driven by a 30% flat tax on capital gains from crypto assets and a 1% tax deduction at source on every crypto transaction, as well as a drop in digital asset prices by up to 80% Since 1 April 2022.
However, Sogni sees an improvement in crypto market sentiment, especially bitcoin, in the near future.
Experts believe that bitcoin will remain stable despite challenging inflation and hitting the $30,000 level in the next two-three months.
“Basically, bitcoin is very strong. There are a few key parameters working in favor. Transaction fees are at an all-time low, transaction speed is good, and difficulty level and hash rate levels are at an all-time high. The number of wallets with bitcoin is also increasing. When the fundamentals are great and the price isn’t doing much, it’s a very good sign,” Sogni said.
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