The latest analysis by Bloomberg Wealth has revealed that Indians, famous for their obsession with Gold, have taken a liking for crypto, and considering it a promising asset class for investment.
In India, where households own more than 25,000 tonnes of gold, investments in crypto grew from about $200 million to nearly $40 billion in the past year, according to Chainalysis.
According to the report, the country’s youngest investors are actually moving away from gold and considering Crypto as more transparent than the gold market. Many are also attracted by the higher returns in a short period of time in crypto.
There are now more than 15 million Indians who are buying and selling digital coins. India is now fast catching up with the US which has 23 million crypto traders. The number looks impressive if you compare it with the UK which has 2.3 million crypto traders.
Indians like to invest in crypto than gold because the crypto market doesn’t have a complicated process to follow. Going online and buying crypto without going through the process of verification seems to give crypto an advantage over the traditional gold investment.
Young investors are moving away from gold to cryto despite the RBI’s resistance to embrace cryptocurrencies. The nation’s central bank has not changed its rigid stance over digital currencies and considers them as “major concerns” about the asset class.
Six months ago, The central government had even favored a blanket ban on trading in digital coins. However, there were some indications that India may soften its hostility towards digital currency, and bring it under regulatory supervision. However, the central government and the regulatory are maintaining silence over it since then.
The four biggest crypto exchanges saw a daily trading jump to $102 million from $10.6 million a year ago, according to CoinGecko. Though India is catching up with the US, but its $40 billion market pales in comparison with China’s $161 billion, according to Chainalysis.
The official hostility means that only smaller investors are talking openly about their holdings in bitcoin. Big investors prefer to remain silent as there is no clarity about income tax rules for this sector.
One big investor, Bloomberg talked to, prefered to remain anonymous, fearing that the Indian Government might resort to retrospective tax raids against big-ticket crypto investors.
The report ends with a positive note and considers increasing adoption of digital coin a good sign of Indians’ willingness to take risk within the consumer finance sector.