Introduction to the Crypto Crunch
Imagine you’re a trader in the bustling bazaars of Mumbai, and suddenly, the government decides to slap a 1% tax on every transaction you make. Well, that’s pretty much what happened in India. Since the rollout of the new Tax Deducted at Source (TDS) policy on Friday, trading volumes across three major Indian crypto exchanges fell a staggering 72.5% on average. It’s like someone put a wet blanket on the party.
The Plunge: Volume Numbers You Won’t Believe
To put it bluntly, those digits are terrifying. Reports indicate that trading volumes on BitBNS dived by 37.4%, and the numbers on CoinDCX dropped an eye-watering 90.9% by Sunday. For traders seeking action, volumes leveled out a tad afterward but still showed a downward trajectory of about 56.8% according to CoinGecko. Ouch!
Revenues Take a Nose-Dive
With trading volumes resembling a rollercoaster that went off the rails, exchange revenues have also plummeted. Indian YouTube channel Crypto India pointed out that revenues based on a 0.1% trading fee are spiraling into the abyss. At their lowest points, WazirX, CoinDCX, and Zebpay together were pulling in a miserable $21,649 per day! With current trends, the exchanges could barely manage between $1,000 to $3,000 – talk about a financial hangover!
The Human Cost: Traders Feel the Heat
Take Mumbai’s own Shounak Shetty. This trader isn’t just wearing a T-shirt that says, “I survive on crypto,” he’s contemplating what it means to be a trader in India. Speaking to Economic Times, he voiced his concerns that TDS combined with a hefty 30% income tax could push skilled traders abroad, creating a potential brain drain to crypto-friendly havens like Dubai. Imagine the loss of talent – it’d be like a cricket team losing its star players!
Looking Forward: The Policy Hurdle
WazirX’s Policy Analyst Anuj Chaudhary made a case on his YouTube show, underscoring that the newly imposed tax extends beyond just crypto to include everything from NFTs to metaverse transactions. Designers of these policies are keeping an eye on the market over the next three months to gauge what’s working and what isn’t. Meanwhile, it seems the only way to escape this is through gift cards and discounts, which thankfully are exempt from this tax fiasco.
The Road Ahead: A Waiting Game
As of now, there’s a mixture of hope and uncertainty as traders adjust to this new landscape. Who knows? The market might just pick up again or continue its descent into chaos. Whatever the future holds, one thing’s for sure: it’ll be anything but boring. Stay tuned, crypto enthusiasts!
