The Indian government declared a 30% tax on income from cryptocurrency profits earned. This streak saw crypto withdrawals worth Rs 32,000 crore, between February to October, 2022, from domestic to foreign exchanges.
A study conducted by the Delhi-based Esya Center found that as much as 25,300 crore was channeled in the first six months of 2022. It is predicted that this will lead to a loss of $99.3 trillion in local crypto exchange trading over a period of 4 years.
“60.8 percent of the drop in the volume of India-centric crypto exchanges is due to domestic market conditions or tax laws during Feb-Oct 2022.”
Domestic centralized crypto exchanges saw a 15% loss in trading volume in February and March 2022. They lost another 14% between April and June. Between July and October, they lost 80% of all trading volume.
According to the report, there is evidence that Indian-centric exchanges are suffering with overseas cryptocurrency exchanges becoming the preferred choice of users from February 2022. Local cryptocurrency exchange app downloads declined by 16% between July and September.
The year 2022 has been a sad and worst year for the crypto market. The total market cap falls from $2 trillion in 2021 to $819 billion on January 4, 2023. This year saw massive falls including the collapse of the FTX exchange.
The price of the largest cryptocurrency, Bitcoin, has fallen by 70% since its all-time high price hit in November 2021.
