Indian crypto exchanges at this moment are going through one of the grimmest crises. As such globally crypto investors are facing huge adversity in terms of heavy losses. Within one and half years the value of cryptocurrencies has witnessed an alarming decline of more than two-thirds. In India, the adverse situation seems to be intensifying in the crypto bloodbath 2.0 in the crypto market. Here the trading volume of the Indian crypto exchanges like WazirX has dropped by 90-85 percent within three months of the introduction of the new crypto laws.
The first blow came for Indian crypto exchanges in the form of the Government of India's decision to impose a tax on cryptocurrencies for Indian crypto investors, besides the recent crypto bloodbath 2.0. With a number of Indian parliamentarians seeking to enhance the tax rate from 30 percent to 50 percent, things became gloomier for the Indian crypto investors. Some even called for a ban on cryptocurrencies, further complicating the issue. Then came the decision of the Reserve Bank of India to increase the TDS on cryptocurrencies by 1 percent for transactions exceeding Rs. 10,000 per year. The threshold limit is extremely low as the crypto trade usually involves transactions of greater size, and this obviously affects the pockets of the crypto traders more heavily. The crypto market and Indian crypto exchanges had reacted to the TDS move in two ways: one section argues that it is good that such a move makes crypto trading more legitimate and a means of more secure investment. The other section points out that it is not only anachronistic in the modern world but also self-defeating for the Government as it would reduce Government's earnings from tax revenue due to the decreased volume of crypto trade.
To provide some concrete data about the plunge being discussed here, Indian crypto exchanges like WazirX's volumes have dropped by 98 percent, ZebPay' by 94 percent, and CoinDCX's by 93 percent. Bitbns has performed stunningly with its traffic only dropping by 17 percent. The scenario has also generated debate on the feasibility of holding virtual coins as many crypto investors, not just individual ones but also some institutions, have developed high pessimism. Though a section of experts advises a cautious approach there is a growing perception that with multiple blows being received the Indian crypto exchanges cannot easily manage the crypto bloodbath 2.0.
To survive the crisis of the crypto bloodbath 2.0, crypto investors need to have a very good command over the functioning of the crypto market through Indian crypto exchanges. For others, who are not so smart, the only option seems to be a prayer for the reversal of the situation.
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