Gold-Focused Indians Turned Their Sight to Bitcoin and Cryptocurrencies
The residents of India, known to be a gold-loving nation, increased their digital assets investments from $200 million last year to $40 billion this year. The exponential growth sounds impressive having in mind the hostile crypto restrictions, which the central bank maintains.
Indians Admire Gold but Love Crypto
The blockchain analysis company Chainalysis reported that the Indian population has started investing massively in crypto in 2021. According to the data, last year’s investments equaled $200 million, while the numbers this year have skyrocketed to $40 billion, even though it’s still the middle of 2021.
The recent statistics support the common opinion that cryptocurrencies could be viewed as a gold replacement or a store of value. Chainalysis reminded that Indians are obsessed with the precious metal, and households in the country hold more than 25,000 tons.
Richi Sood is one of the locals who switched his investment strategy from gold to digital assets. The 32-year-old entrepreneur, who since the end of 2020, has allocated around 1 million rupees ($13,400) in bitcoin (BTC), ether (ETH), and Dogecoin (DOGE), explained why the crypto market is better than the yellow metal:
“I would rather put my money in crypto than gold. Crypto is more transparent than gold or assets and yields higher returns in a shorter period of time.”
Per the research, the number of people who trade cryptocurrencies in India is 15 million. It significantly surpasses a well-developed country such as the UK, for example, where 2.3 million individuals have entered the market. Moreover, the world’s largest economy – the US – with its 23 million merchants does not stand far away from India.
Sandeep Goenka, the co-founder of ZebPay, revealed the reasons why India saw this massive increase:
“They find it far easier to invest in crypto than gold because the process is so much simpler. You go online, you can buy crypto, you don’t have to verify it, unlike gold.”
India’s Controversial Crypto Stance
The authorities of the second-most populated country have been very indecisive on their view towards cryptocurrencies lately. First, in March this year, they contemplated a bill to criminalize custody, mining, and trading with bitcoin and alternative coins.
The legislation was meant to place cryptocurrency holders and miners at risk of financial penalties and even possible jail time. The Indian government did not disclose the exact amount of the fines but revealed that those who break the upcoming rules could spend up to 10 years behind bars.
However, at the beginning of June, reports emerged claiming a change of plans. Instead of banning digital assets, the officials intended to legislate Bitcoin as an asset class.
Interestingly, the Indian billionaire Nandan Nilekani also advised the Indian government to enforce that move. The co-founder of Infosys argued that there is huge potential in the crypto market, and the authorities should not restrict “crypto guys to put their wealth into India’s economy.”