The Indian cryptocurrency market is still battling an economic slowdown, and it does not appear that the situation will improve anytime soon. This is due to a sudden slowdown in trading volume, due to the new one percent TDS imposed by the government, which has exacerbated the decline in the average daily transactions of crypto tokens like bitcoin and ethereum in India.
Major crypto exchanges such as WazirX, CoinDCX and Zebpay reported a drop in daily transaction volume from around $10 million to $5.6 million in the few days since the new tax regime came into force. BitBNS and CoinDCX said the decline in transactions on their platforms was 37.4 percent and 90.9 percent, respectively. According to crypto research and consulting firm Crabaco, WazirX reported an 82 percent drop in daily average transactions.
The new 1 percent TDS on cryptocurrency transactions dents profits earned by exchanges, which started paying 30 percent tax to the government as part of a rule framed in April.
Too early to say anything?
Crypto exchanges, however, are not disappointed about the declining transactions, saying that it is too early to measure the impact of one percent TDS. The exchanges said that since trading is usually low on weekends, it will take some time to assess the impact. On the other hand, experts are not very optimistic about an imminent rally in trading, even if the market shows signs of recovery.
The current economic downturn and the Federal Reserve’s buoyancy have forced crypto tokens to remain largely in the red, even though they see the occasional surge. According to the Economic Times, the gray market will continue to flourish due to the ongoing crisis in global macroeconomic conditions. While some crypto exchanges seem resourceful enough to endure adverse waves, some exchanges have had to close up shop.
Hyderabad-based crypto exchange Wold, which is funded by Coinbase, recently halted all transactions as it laid off a large part of its staff to streamline business goals. Other crypto exchanges are looking to diversify into other sectors to absorb the impact and stay afloat.
Bitcoin bears down after crypto TDS in India, Ethereum trading first appeared on BGR India.