Hurt by risk averse market sentiment and crippling fall in trading volumes, crypto exchanges in India have become leaner and expanded beyond cryptocurrencies to sustain their business. The jury is still out on whether these measures will help avoid or accelerate their demise
It’s been over 365 days now since the dawn of the crypto winter. The industry has seen several such in the past decade. The previous one lasted over two years from January 2018 to December 2020. Most of 2021 was a steady growth period for the crypto market–it saw the creation of India’s two crypto-based unicorns–when Bitcoin (BTC) hit a 52-week high of $68,990 in November 2021 before a downward spiral. Bitcoin is currently priced at $27,200 at the time of writing, 60 percent off its peak.
A series of events in 2022, like the Terra-Luna crash, the collapse of FTX, central banks tightening monetary policy to curb stubbornly high inflation and stringent domestic tax rules, have all led to the bear market. In this scenario, the small group of nearly ten crypto exchanges and platforms stand battered and weakened in this harsh winter where monthly trading volumes have collapsed by 75 percent on average and investors moved to trade at exchanges overseas.
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Assuming that there are banking problems that are not deal breakers and the regulatory climate remains suspicious and uneasy but does not worsen, and if the bearish market environment extends for one-two years, Khurana still does not see a “bloodbath” in the crypto ecosystem here.