The last few months have seen a lot of private capital flow in the Indian cryptocurrency ecosystem. Many exchanges have raised money and are deploying most of the money into marketing. New projects are also being set up. While there is still no clarity from the government on how they plan to treat Bitcoin and other digital assets, public enthusiasm is on the high. The recent price action of Bitcoin has also helped and celebrity endorsements have also been handy. Moreover, there were reports a month or so ago that the Indian government is planning to treat some cryptocurrencies as commodities, especially Bitcoin. I think this assumption of the Indian government's stance, and extensive marketing by exchanges has attracted a lot of new users to this space in India.
During the last 12 months, some of the fastest-growing regions for cryptocurrency were the Middle East, followed by Europe and then South Asian nations such as India and Pakistan. In fact, the cryptocurrency market growth in India during the last year was a whopping 641%! This data is basically taking a look at the amount of cryptocurrency being accumulated/sent to a country. The analysis was conducted by Chainalysis.
The above Chart shows that Indians are more interested in Ether. The portfolio looks well balanced. Stablecoin activity is also quite high. It may be being used for off-shore transactions and also for remittances since it is orders of magnitude cheaper than banks.
If one looks deeper into the report from Chainalysis, then Indians are most active in the South Asian and Southeast Asian region as far as DeFi is concerned. When looking at all the DeFi transactions that originated in these regions, transactions based out of India stood at well over 40%. Even big movie celebrities such as Amitabh Bachchan are getting on the NFT bandwagon Link. The Chainalysis report also shows that if one looks at all the large ticket transactions, India leads the way followed by Pakistan and Vietnam, implying that institutional style trades are highest in the country.
It is good that the Indian cryptocurrency ecosystem is expanding. In fact, with celebrities joining the party, cryptocurrency may become mainstream in India rapidly. Hope that the Indian government will not spoil the party!