P2P bitcoin trading volumes have surged in India after the introduction of stricter tax laws. Q3 2022, in particular, saw huge growth.
According to data from Coin Dance, P2P bitcoin trading in India has almost doubled in the past one year. The data looks at India’s trading volume on Paxful, with the current weekly volume at around 121 BTC. At the same time last year, weekly trading was at 65 BTC.
bitcoin trading spike in india
The biggest trading volume was seen in July, with the figure crossing 570 BTC. There has been a significant year-on-year increase since Q3 2021, when Indians traded $11.2 million worth of BTC. In Q3 2022, this figure was $15.7 million
This represents a 40% increase in bitcoin trading in the country, which has been hit hard by the new tax rules that came into force this year. In Q3, in particular, the biggest growth was seen in P2P trading, which was after the implementation of the tax scheme.
It is not surprising that direct trade will boom. The tax regime has many Indians looking for different ways to invest in the market, and there will undoubtedly be more regulations in the future.
Crypto Exchange Volumes Have Fallen in India
Meanwhile, crypto exchanges in India are suffering as the volumes have gone down since the tax laws came into force. Major exchanges WazirX, Zebpay and CoinDCX have also seen significant drop in trading volume.
Figures were consistently high on all exchanges through the end of May, with WazirX seeing volumes as high as $163 million. Zebpay and CoinDCX saw volumes as high as $27 million and $49 million respectively.
Since May, volumes on all exchanges have been consistently below $1 million. The harsh tax laws have severely curtailed the desire to do business, while crypto companies are deciding to leave the country for crypto-friendly areas such as Dubai.
New tax schemes hurting the crypto market
Tax rules in India impose some strict rules for the citizens and also do not allow them to compensate the laws. This has alienated Indians from the asset class, though it still has a substantial following with at least 100 million crypto investors. There have been several opinions criticizing the rules, stating that they would stifle innovation.
For example, ZebPay has decided to obtain licenses in Singapore and Dubai. WazirX also had to lay off 40% of its employees after the crypto winter and volume collapse.
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