In contrast to "the best bull run India" witnessed in 2021, the year end reports saw a huge fall in crypto trading in the year 2022.
What happened: In a recently released report by WazirX, bitcoin and cryptocurrency exchange, there had been recorded a whopping 76% drop in the users trading volumes on the exchange.
Report took into consideration the time period from January 2022 to November 2022.
Why it matters: The year 2021 saw huge runs in what is even being referred to as its best bull market.
The drastic drop in 2022 can be attributed to several reasons, most significant ine being the imposition of the tax imposition on digital assets since April 2022.
The big picture: Given the lack of existing regulations to command the course of action
in case of massive losses in the portfolio or bad actors who run fraudulent businesses to trap vulnerable investors, Crypto has had an uncertain way forward in India.
Further, the 2022-2023 unionn budget introduced a 30 per cent tax on virtual digital assets profits and a one per cent tax deduction at source on all crypto transactions thus putting crypto currency onto the backburner.
Backdrop: Reports claim that the massive downturn came with the collapse of several large enterprises, which included FTX, Terraform Labs (creator of TerraUSD), Celsius Network and Voyager Digital, to name a few.
The numbers: During the time period of January -November 2021, the trade volume reached $43 billion which fuelled hope in digital assets, but all such hopes crashed in the volatility of 2022.
What is being said: WazirX stated that-
“After five years of consistent efforts to provide easy crypto access to users, we witnessed market sentiments reaching an alarming low. This was in contrast to the positive sentiment we saw in the last few years, especially in 2021, when crypto saw its best bull run ever.”
Catch up quick: With massive trading seen last year, the expectations were similar if not higher for 2022 as well. But rather than reaching new heights, the trading markets saw a massive fall in the user base.