The crypto trading scene in India is experiencing a significant boom, especially in smaller cities, as investors seek out new opportunities in the face of slow job growth and tightening financial regulations. According to a report by Reuters on Feb. 25, trading volumes on the country’s top four exchanges have more than doubled in the last quarter, reaching a total of $1.9 billion, as per data from CoinGecko.
This surge in activity is partly driven by regulatory restrictions on stock options trading, which have pushed retail investors towards digital assets. With a large portion of India’s 1.4 billion population under the age of 35, there is a growing trend of young traders looking to achieve financial independence through the crypto markets.
Retail momentum in the crypto market is no longer limited to major financial centers, as traders from smaller cities are now actively participating. Data from CoinSwitch, one of India’s largest crypto platforms, reveals that seven of the top ten cities driving crypto adoption in 2024 were non-metro locations like Jaipur, Lucknow, and Pune.
Balaji Srihari, vice president at CoinSwitch, noted that “Retail trading is expanding beyond the big cities. The same trend that reshaped equity markets is now playing out in crypto.” To meet the demand from new investors, exchanges and trading academies are offering educational programs tailored to crypto trading. Platforms like Thoughts Magic Trading Academy in Nagpur have seen a surge in students looking to transition from stock options to crypto trading.
Despite the growing interest in cryptocurrencies, India’s regulatory stance on the sector remains uncertain. The government has yet to introduce a comprehensive framework, and oversight responsibilities are still unclear. While a steep 30% tax has been imposed on crypto trading gains, specific securities laws for digital assets have not been implemented.
The Reserve Bank of India has maintained a cautious approach, citing concerns over potential financial stability risks associated with widespread crypto adoption. In its December 2024 Financial Stability Report, the central bank highlighted worries about volatility and macroeconomic impacts.
However, these regulatory uncertainties have not deterred retail participation in the crypto market. With job growth lagging behind economic expansion, many investors, particularly in smaller cities, see crypto trading as a way to supplement their income and achieve financial independence.
As India’s crypto sector continues to grow, with expectations of reaching over $15 billion by 2035, it is clear that the demand for digital assets is on the rise. Despite the regulatory challenges, the allure of crypto trading as a means to secure financial stability and independence remains strong for many investors in India.