Investors nervous over crypto crash
Volumes on crypto exchanges shrinking in India; Crypto-related startups slowing down hiring
image for illustrative purpose
Major Correction
- Globally, equity, crypto mkts highly correlated now
- Bearish trend to persist in short term
- Now, focus is on optimising costs
- However, there are new projects propping every day
The Indian market is not unaffected and there is extreme fear in the market as everyone is trying to predict what will be the bottom of the market. The volume on the exchanges has dropped off in recent times primarily because of the new tax laws and the falling crypto prices, said Amanjot Malhotra, country head (India), Bitay
Bengaluru: Fall in cryptocurrency prices globally is negatively impacting volume in crypto exchanges in India as investors are in a 'wait and watch' mode. Officials of cryptocurrency exchanges and NFT (non-fungible token) ventures said crypto exchanges and related startups have slowed down their hiring plans and are more focused on cost optimisation owing to the current scenario.
"The Indian market is not unaffected and there is extreme fear in the market as everyone is trying to predict what will be the bottom of the market. The volume on the exchanges has dropped off in recent times primarily because of the new tax laws and the falling crypto prices," Amanjot Malhotra, country head (India), Bitay, told the BizzBuzz.
Turkish cryptocurrency exchange Bitay is planning to foray into India soon and has already set up its office in Gurgaon.
"Due to the current scenario, companies have stopped hiring new employees and the focus is on optimising cost as compared to expanding business. But at the same time, there are new projects propping every day which are trying to innovate in the space," he added.
Global cryptocurrency market is facing severe volatility, which is more or less similar to equity markets currently. On Monday this week, Bitcoin and Ethereum plunged by more than 15 per cent, marking a new 18-month low for the two most well-known cryptocurrencies on the market. Bitcoin fell below $23,000, while ethereum dropped under $1,200. This coupled with the recent crash in Terra LUNA is making people cautious on making future investments.
"Crypto markets have seen a correction due to weak global cues. Internationally, stock and crypto markets have become highly correlated. In India, the central bank raised the full-year forecast for the FY23 consumer price index to 6.7 per cent, which is more than the target, and the Indian rupee has hit a record low of 78.28. Hence, the investors have adopted a wait-and-watch stance as the early indicators are in the red. We expect this bearish market trend to persist in the near short term," said Rajagopal Menon, vice-president at WazirX.
Meanwhile, officials of many NFT ventures said the volatility in the crypto market is not correlated to NFTs and users are not shying away to invest in these forms of digital assets.
Come to think of it, NFTs are not in any way connected to cryptocurrency except for the small, but easily replaceable dependency on crypto payments. There have been platforms like GuardianLink that have done away with the need for paying for and trading of NFTs in crypto. The crypto winter will do more good for NFTs than bad because it will serve as a catalyst to detach NFTs from cryptocurrency. Even if not for complete detachment, it will at least help in diluting the attachment, so people with fiat currency can also buy & trade NFTs. The entry of NFTs into the world of mainstream commerce will only serve to bring more people into trading and collecting NFTs," said Ramkumar Subramaniam, CEO & Co-founder of NFT platform GuardianLink.
