Indian crypto exchanges aren’t worried about the lull in trading volumes — they see it as an opportunity
- A bear market in the crypto sector is time for innovation, increasing capacities and building new products for Indian crypto players.
- The global lull has resulted in trading volumes dropping by at least 50% on exchanges like
WazirX, CoinSwitch Kuberand CoinDCX.
- CoinSwitch Kuber CEO, Ashish Singhal, told Business Insider that the crypto maket’s volatility is just a part of market building.
The slowdown in the crypto market over the past couple of months has given crypto exchanges, especially in India, a chance to take stock of their services.
“Bear market brings in an opportunity for us to further strengthen security and work on building educational initiatives to bring more awareness around crypto as an asset class,” Ashish Singhal, CEO and co-founder of CoinSwitch Kuber told Business Insider. “Volatility is just a part of market building. We are hopeful that the market will see a steady recovery.”
With regulatory troubles, overwhelming trading volumes and more, exchanges have all hands on deck. But with the pressure easing now, they are looking to build capacities for when the next big boom in crypto happens.
“Of course, with a strong and clear regulatory framework in place, the entire crypto industry would benefit from the measures and help propel the next growth phase of crypto adoption in our country."
The crypto bear market is a global phenomenon
Globally, the ratio of Bitcoin held on exchanges in comparison to the total number of coins in circulation has fallen to 13% in July — the lowest level in 6 months — according to data from crypto analytics group Santiment.
Similarly, the amount of Ether held on exchanges as a percentage of total supply fell to just 18% in June.
"The crypto market is down globally. This isn't India specific. Moreover, factors like China's crackdown and Elon Musk's current stance, could also be the reason for the current market state."
Meanwhile in India, the trading volume within most Indian exchanges has more than halved since the peaks of April and May, when Bitcoin and other cryptocurrencies were on a bull run.
Fall in trading volumes likely means that more people are HODL’ing
A fall in the amount of cryptocurrency held on exchanges isn’t necessarily a ‘bad’ thing. In fact, it suggests that more people are buying tokens and holding them in their own private wallets — off the exchange — which means there is less scope for a big sell-off.
"Consolidation is widely considered to be a sign of the crypto markets maturing with more investors adopting a longer-term approach towards crypto assets,” Gupta told Business Insider.
CoinDCX currently has 3 million users on all its platforms with an eventual goal of onboarding 50 million users by the end of 2021.
Indian exchanges want to use the lull to build up more services
As the price of Bitcoin and other cryptocurrencies continues to drop and the trading volume remains limited — it gives crypto firms the time to innovate, whether that’s exchanges or decentralised finance (DeFi) apps.
Like CoinDCX and CoinSwitch Kuber, WazirX is also looking to add new features and improve the platform and has hired over 100 new people for marketing, tech and support purposes, according to the Economic Times (ET).
A DeFi app built on the Ethereum chain ultimately will benefit the Ether currency too, so it is in a large investor's interest to promote firms that are truly innovating using blockchains.
But crypto firms may not have a lot of time on their hands. The recent rise in stocks linked to Bitcoin mining — like Riot Blockchain, Marathon Digital, and Nvidia — may be a positive signal for the cryptocurrency prices, according to research firm Fundstrat. David Grider, the lead digital asset strategist at the company, explained that bitcoin mining stocks tend to rise and fall ahead of bitcoin.
However, others, like Amber Group CEO Michael Wu, believe that Bitcoin will have to drop to at least $25,000 before investors get back on the horse.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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