India’s trading volume in cryptocurrencies was approximately $1.9 billion in the fourth quarter of 2024. This is close to twice that of the previous quarter. Due to strict taxation, the cryptocurrency market in India has witnessed a growth spurt in the past few years.
According to a report published on 25 February 2025 by Reuters, the growth can especially be seen in small towns as individuals are looking for alternative sources of income because of the stagnant job market.
Moreover, US President Donald Trump’s election has also created a worldwide interest in crypto assets, which has driven the transition from conventional investment instruments to investing in digital assets.
Edul Patel, co-founder of Mudrex, an Indian crypto exchange noted, “There is a lot of curiosity at the ground level … especially with Trump becoming the US president and the entire flavour of crypto changing world over.”
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Demographics Works In Favor Of The Indian Crypto Dream
Kush Wadhwa, a consulting firm Grant Thornton Bharat partner, estimates the Indian crypto market to expand far beyond $15 billion by 2035 despite huge taxes. The country has a large number of young, digitally literate citizens. Therefore, there is a natural inclination towards crypto and other on-chain digital assets.
Jaipur and Pune are among the cities that have emerged as crypto trading hubs in India, driven by retail investors as well as educational institutions at the forefront of awareness and education on digital assets.
There has been a retail investment boom in India, which has seen US-based exchanges take advantage of the favourable crypto uptrend. Kraken, a US-based cryptocurrency exchange, is expected to return to India after it was banned in 2024. Coinbase is also planning to return to India after exiting the Indian market in 2023.
JUST IN:
Coinbase to re-enter India, after officially exiting Indian market in 2022. – @TechCrunch reports pic.twitter.com/wBAMbQHDeu
— Crypto India (@CryptooIndia) February 13, 2025
But despite the increasing interest, the RBI and the Indian government have been wary of crypto assets. The market is currently awaiting the development of a robust crypto framework based on a consultation paper that is yet to be published.
30% tax levied on crypto trading gains in India is a strong disincentive for investors. However, the country has not introduced any new laws to regulate crypto. Nor has crypto been made a part of existing securities rule.
It is currently unclear as to who has regulatory oversight of crypto in the country.
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Balancing Growth and Security
The surge in crypto interest in India is also accompanied by a boom in crypto-related fraudulent activities. The Enforcement Directorate (ED) recently conducted multiple raids across various cities in India in connection with a Rs 600-crore crypto scam.
According to a local news outlet, the investigation in this matter was initiated after reports indicated an Indian national – Chirag Tomar serving a prison sentence in the USA. Tomar was indicted for defrauding victims to the tune of $20 million through fake websites mimicking legit crypto exchanges.
The ED claimed that this scheme funnelled approximately INR 15 crore ($1.7 million approx) to Tomar and his family.
The rise in crypto frauds along with its adoption poses a complex challenge to Indian regulators. While crypto trading opens up the possibility of additional income streams for many, ensuring investor security is paramount to maintaining trust.
A comprehensive regulatory framework must facilitate innovation and growth while implementing strict measures to deter fraudulent activities.
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Key Takeaways
- Crypto trading in India’s smaller cities is rising due to weak job growth and income stagnation.
- Regulatory challenges and high taxes create uncertainty for investors despite growing interest in digital assets.
- Crypto scams are increasing, prompting government crackdowns to protect investors from fraudulent activities.
The post Indian Crypto Market To Expand Beyond $15 Billion By 2035 Despite High Taxes appeared first on 99Bitcoins.
