- COVID-19 outbreak combined with multiple other elements, transformed India's crypto scene.
- Numerous exchanges have reported huge surges in trading volumes, while traditional markets only see selloff.
- Some theories claim that the lockdown will help the crypto space develop and establish itself in the country.
India’s relationship with cryptocurrencies is easily among the most complicated around the world these days. The country suffered a 2-year long ban that prevented banks from servicing entities connected to crypto. However, as soon as the Supreme Court lifted the ban in early March, trading volumes surged.
Bitcoin comes to the rescue as Indian economy fails
The CEO of a crypto exchange CoinSwitch, Ashish Singhal, commented on the new situation. He said that “There has been a considerable increase in trading volumes on exchanges catering to Indian clients due to the clarity offered by the Supreme Court’s ruling.”
Crypto banking platforms, such as Cashaa, also saw massive spikes. Cashaa itself noted a trading volume surge of 800%. Originally, rumors that the government might make cryptos illegal caused many to rush their trading. However, as time passed and the government made no such move, the traders relaxed, but the momentum remained.
Crypto trading also got a new wind on March 6th, as one of the country’s largest banks, Yes Bank, collapsed. The event damaged the already crumbling confidence in traditional banking systems, and panic led people to Bitcoin.
Meanwhile, the coronavirus outbreak also caused its own fair share of panic, damaging traditional markets such as bonds and equities. This concerned the entire world, as the virus spread throughout the US and EU. India itself saw massive drops in equity indexes throughout March. At the same time, its fiat currency, the rupee, saw record lows of 77.40 per each USD.
Coronavirus-caused lockdown leads to a surge in crypto trading
The virus outbreak also forced the nation’s Prime Minister to announce a three-week lockdown, starting on March 24th. With all of this combined, Indian traders ended up home, selling traditional assets, and turning to crypto.
CoinSwitch’s Singhal stated that March was easily one of the best months, which doubled the exchange’s volume. Other exchanges, such as WazirX, also noticed a similar surge during the lockdown. The fact that crypto trading is available 24/7, as opposed to traditional markets’ 9 am to 3:30 pm likely also helped.
The design of digital currencies seems perfect for situations like these. Their borderless, decentralized nature and ability to make P2P payments instantly helped people relax. Now, people are theorizing that the crypto industry’s success will grow more, the longer people cannot go outside.
Digital currencies cannot help spread the virus due to contactless payments. Meanwhile, people can still earn money, whether through trades or remote work, from the safety of their homes. No matter how volatile BTC may still be in 2020, the investors’ and traders’ interest certainly seems to have picked up.