India opts for crypto with investment rising by 19,900%, pushing gold to a two-month low

Total crypto investment in India has hit $40 billion from $200 million in the previous year. 
Gold futures on the other hand are near a two-month low in the country.

New crypto law implementation has been in the pipeline in India after the Supreme Court overturned a crypto ban that stood for two years. However, contradictory reports from the region have made it difficult to predict what to expect. Regardless of what the upcoming laws may entail, Indians are investing billions in the crypto market according to research by Chainalysis. 

The new report reveals that nationwide investment in digital currencies increased by 19,900 percent in the past year. This indicates that the total investment in cryptos across the country has hit $40 billion from $200 million in the previous year. With a population of almost 1.4 billion, the researchers discovered that 15 million Indians are exposed to crypto. 

In March 2020, the Indian Supreme Court reversed a decision by the Reserve Bank of India banning financial institutions from facilitating transactions for companies that operate with digital assets. Since then, the nationwide investment in digital assets has steadily surged, reaching its record point in Q1 when the crypto market was at its peak. 

Indians switch gold for crypto

Households own roughly 25,000 tonnes of gold in India. However, the rising demand for cryptos has made it less popular among young adults. According to Sandeep Goenka, co-founder of Zebpay, crypto is most preferable because of its convenience compared to gold. 

They find it far easier to invest in crypto than gold because the process is very simple. You go online, you can buy crypto, you don’t have to verify it, unlike gold.

A 32-year-old entrepreneur, Richi Stood, has invested $13,400 in Ethereum, Bitcoin, and Dogecoin since December. She exited her position when Bitcoin surged to $50,000, then re-entered the market after the ongoing downtrend. According to her, Bitcoin is better than gold for a number of reasons. 

I’d rather put my money in crypto than gold. Crypto is more transparent than gold or property and returns are more in a short period.

Data from the World Gold Council reveals that Indian adults under the age of 34 years have less appetite for gold. Digital currencies are mainly bought by people between 18 years and 35 years. This age gap better understands the technology and has an appetite for volatility which offers both high rewards and risks.

One 22-year-old digital marketer, Keneth Alvares, has a strong conviction that every country will soon adopt digital currencies. Though the currency regulatory uncertainties look scary, he said he will not sell a dollar from his $1,300 crypto investment. 

With the rising demand for Bitcoin, gold futures are at a near two months low of  ₹46,970 per gram in India. Despite the fall in price, retail demand remains weak as dealers offer discounts of up to $12 an ounce which is the highest since mid-September 2020.


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