Indian Crypto Exchange WazirX’s Trading Volume Jumps to Over $43B in 2021.
Despite lingering regulatory uncertainty and market volatility, WazirX, a Mumbai-based digital assets exchange, had record-breaking activity this year as investors from smaller Indian cities joined the crypto bandwagon.
The Binance-owned entity had annual trade volume of over $43 billion, representing a whopping 1,735 percent increase over 2020, according to a report issued by the exchange and shared with CoinDesk on Thursday.
"We saw over 700 percent rise in signups from smaller locations like Guwahati, Karnal, and Bareilly, among others," according to the study 2021 The Year of Crypto Highlights and Observations. "It demonstrates that crypto usage is increasing in semi-urban and rural India."
While the exchange introduced more than 200 market pairs, bitcoin remained the most popular cryptocurrency, followed by tether and meme tokens DOGE and SHIB, WazirX token (WRX), and Polygon's MATIC scaling solution.
Indian retail investors bought up relatively cheap and more volatile coins like DOGE and SHIB, maybe hoping to make a lot of money on a small investment — a pattern seen around the world, including in Turkey, which is experiencing high inflation. Investor interest in these coins peaked in the weeks leading up to the Diwali celebration, which took place in early November.
The report sais, male investors dominated the action in the volatile meme tokens, while female investors typically traded bitcoin. However, the number of new female users climbed 1,009%, outpacing the 829 percent increase in male signups, indicating a generational shift, which is also reflected in the growing popularity of cryptocurrency among the younger generation.
"Only 11% of respondents in the age range of 51 years and above indicated they had dedicated over 50% of their overall portfolio to crypto, whereas 29% of respondents in the age group of 18-24 years did the same," according to WazirX. "On WazirX, 66% of users are under the age of 35."
With central banks flooding the global economy with fiat currency in the aftermath of the coronavirus-induced crash of 2020, cryptocurrencies have developed as an alternative asset class in India and around the world.
"As more people learned about crypto and began to participate in this growing alternative asset class, WazirX saw a significant increase in user signups, eventually surpassing 10 million members," according to the report.
"During these frightening times [of the coronavirus epidemic], crypto has not only provided new opportunities for ordinary people to earn money online, but it has also fought the pandemic, with the Indian crypto community stepping forward to assist our country," WazirX stated.
Despite a lack of legislative clarity, cryptocurrency usage has exploded in India. According to local reports, the Indian government has been working on a crypto regulatory bill for at least a year and is unlikely to introduce it during the current winter session of parliament.
While the Indian government has softened its attitude on cryptocurrencies in recent months, the Reserve Bank of India is still anti-crypto, with governor Shaktikanta Das recently stating that the decade-old blockchain technology can exist without digital tokens.
WazirX, on the other hand, is optimistic that the government would regulate rather than outright outlaw cryptocurrencies, and that Indian institutions will follow in the footsteps of their American counterparts in adopting cryptocurrency.
"The government's push for a regulated approach to crypto would put India on par with other developed countries that are dealing with the technology. This, combined with significant institutional crypto engagement, would go a long way toward ensuring the survival of this popular asset class in India and assisting us in becoming Atmanirbhar Bharat [self-reliant India], according to WazirX CEO Nischal Shetty.