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Over 15 million investors, with most of them between 18-34 years, are exposed to cryptocurrencies in gold-obsessed India.
Crypto investments in India grew from just $200 million to nearly $40 billion over the past year, Bloomberg has reported, citing data shared by blockchain analytics firm Chainalysis.
According to Chainalysis, crypto investors began to pump more into Bitcoin and other digital assets around June 2020. The upturn in the investment curve continued to rise throughout the second half of the year, peaking around the time the price of Bitcoin crossed the 2017 all-time high in December.
Investors poured even more into crypto as other major cryptocurrencies mirrored the benchmark cryptocurrency to hit respective new all-time highs in the first quarter of 2021.
The growth represents an increase of a staggering 19,900% in the amount of money put into digital assets in a country obsessed with gold.
An estimated 25,000 tonnes of gold is held by Indians, making it one of the most preferred assets for new investors. However, crypto is seeing massive interest even as uncertainty continues to swirl regarding the state of crypto regulation in the country.
Sandeep Goenka, the co-founder of local cryptocurrency exchange ZebPay, told Bloomberg that most of those investing in crypto are young people in the 18-35 year age bracket. According to him, this group of investors is enthused by the ease with which they can invest in digital assets as opposed to gold.
“They find it far easier to invest in crypto than gold because the process is very simple. You go online, you can buy crypto; you don’t have to verify it, unlike gold,” Sandeep noted.
It is estimated that close to 15 million Indians have invested in or hold cryptocurrencies. In comparison, exposure to cryptocurrencies stands around 23 million in the US and just 2.3 million in the United Kingdom.
In March 2020, India’s Supreme Court overturned a Reserve Bank of India ban on banks that prohibited the provision of financial services to crypto businesses. Despite this, regulators continue to express concern and have threatened new restrictions and bans many times over this past year.