Crypto craze grips Indian small towns as youngsters look to diversify portfolios

India’s cryptocurrency market is rapidly evolving, with smaller cities and towns stepping up as active players in the digital assets space.

A recent report by CoinSwitch says tier-2 and tier-3 cities like Botad, Jalandhar, Patna, Kanchipuram, and Dehradun are becoming increasingly active in the country's crypto ecosystem.

This marks a significant shift from the earlier dominance of major metropolitan areas like Delhi, Mumbai, and Bengaluru.

This wave of growth is primarily driven by younger investors, many of whom are under 35, looking to diversify their portfolios with cryptocurrencies.

The country now boasts over 2 crore crypto users, with a majority exploring a range of digital assets, from mainstream cryptocurrencies like Bitcoin and Ethereum to niche meme coins and decentralised finance (DeFi) tokens.

Younger investors dominate the crypto landscape

CoinSwitch’s report reveals that young Indians are leading the charge in crypto adoption, with 75% of investors aged 35 or younger.

The 26-35 age group accounts for the largest segment at 42%, followed by the 18-25 demographic at 30%.

Even older age groups are beginning to participate more actively, with individuals aged 36 and above now contributing 28% to the market.

Balaji Srihari, Vice President at CoinSwitch, said,

2024 has been a huge year for the global crypto ecosystem, driven by big political and regulatory changes that have sped up mainstream growth. At CoinSwitch, we’ve witnessed a spike in crypto investment across India.

"What was once concentrated in major metros is now quickly expanding to Tier-2 and Tier-3 cities, reflecting the growing appeal. Indian investors are diversifying their portfolios, exploring everything from meme coins to Layer-1 and DeFi tokens," he added.

In an interview with Invezz earlier this year, Sumit Gupta, co-founder of CoinDCX, one of the leading cryptocurrency exchanges in India, said maturation of Indian crypto investors on the platform was one of the most striking trends that the company witnessed.

"The average age rose from 25 in 2022 to 30 in 2023, attracting seasoned investors beyond the traditionally young demographic," he said.

Smaller cities shaping India’s crypto future

Regional diversification is reshaping India’s crypto market. While Delhi-NCR continues to lead in overall investment volumes, smaller cities are catching up fast.

Bengaluru emerged as the leader in Layer-1 token activity, while Barbaka, a town in Assam, dominated the DeFi segment with 24% of participation.

Jalandhar showed its strength in meme coin investments, contributing 18% to the sector.

Gupta had also revealed insights that concur with CoinSwitch's findings.

"Tier-2 cities like Lucknow and Patna emerged as surprising leaders in crypto adoption. Jaipur, Indore, Bhubaneswar, and Ludhiana, breaking into the top 15, challenged the notion of major urban centres monopolizing the crypto investment space," he said.

Meme coins and DeFi tokens rise in popularity

Meme coins have emerged as a significant category, accounting for 13% of India’s total crypto investments in 2024.

Dogecoin remains the top choice, capturing 55% of all meme coin investments, followed by PEPE at 12% and BONK at 6%.

PEPE has been a standout performer, recording an incredible 1300% growth this year.

Layer-1 tokens continue to dominate the crypto landscape with 37% of total investments, while DeFi tokens have secured the second spot with a 17% share.

Meme coins, gaming tokens, and Layer-2 assets have also made notable contributions, collectively accounting for over 81% of the market in 2024.