P2P Bitcoin Trading In India Spikes 100% Amidst Crypto Winter
India's peer-to-peer (P2P) Bitcoin trading volume has experienced a considerable increase after the authorities implemented stricter tax rules. Most of this increase occured in the last quarter.
This report was from recent data by the community-driven Bitcoin data platform, CoinDance.
The data showed that peer-to-peer Bitcoin trading in the country has almost doubled that of last year. According to the data, India's weekly trading volume is currently at around 121 BTC on the Paxful trading platform. However, the trading volumes were at 65 BTC by this same time last year.
Bitcoin Trading In India Jumps
The month of July recorded the biggest trading volumes in India, with the figures exceeding 570 BTC. This spike is also seen in the country's Q3 2022 report. In Q3 2021, Indian citizens traded $11.2 million worth of BTC, while the figure rose to $15.7 million in Q3 2022.
The spike shows that India's Bitcoin trading volume has increased by over 40% from the past year. This surge comes after the government imposed new tax regulations for the crypto market. The new rules are expected to go into effect this year.
The third quarter of this year saw the largest spike in P2P trading. Ironically, it happened after the government announced a new tax scheme for the crypto sector. However, it's not surprising that P2P trading is causing an increase in direct Bitcoin or crypto trading in the country.
The latest tax regulations made most Indian Bitcoin traders and investors more interested in investing in crypto. Hence, they keep seeking ways to invest and earn from the crypto market. But, there will likely be stricter regulations for the crypto market.
Cryptocurrency Exchange Volumes Have Dropped in India
P2P Bitcoin trading volume surged in India in the last 12 months. However, crypto trading volume on cryptocurrency exchanges has dropped drastically following the implementation of the new tax rules.
Leading crypto exchanges like WazirX, Zebpay, and CoinDCX have also witnessed considerable declines in trading volumes in the country. Crypto exchange trade volumes were high until the end of May 2022 during this peak period.
India-based exchanges saw trading volumes rise by as much as $163 million. Zebpay and CoinDCX crypto exchanges recorded trading volumes of about $27 million and $49 million, respectively.
But after May, the crypto exchanges in India have recorded volumes below $1 million. The harsh tax regulations caused a drop in the desire of traders and investors to trade with crypto exchanges.
Some crypto exchanges have started planning to move their services to more crypto-friendly regions like Dubai. However, the new tax regulations are harsh for India's crypto industry as investors cannot offset some laws.
Many industry analysts have criticized these rules, saying they will undermine innovation. Zebpay crypto exchange is considering getting licenses in Singapore and Dubai. Also, WazirX sacked 40% of its employees, citing the crypto winter and drop in crypto trade volumes.