Indian cryptocurrency trailblazers reveal insights into the effects of Bitcoin halving
India has experienced a surge in demand for cryptocurrencies since the beginning of 2024, resulting in notable increases in trading volumes on exchanges. Despite the lack of proper regulations and a heavy tax on crypto gains, Indians are becoming more interested in the emerging digital asset sector. With Bitcoin’s next halving approaching in April 2024, the cryptocurrency community in India is closely observing the potential impacts on market dynamics and investor behavior.
According to Edul Patel, CEO & Co-founder of Mudrex, data suggests a complex interaction of market forces after halving events. In the past, Bitcoin’s price typically surged after halvings, followed by a correction. However, this time, Bitcoin has already reached a new record high, indicating a potential correction around the halving.
While halvings have historically been catalysts for bullish cycles, this year’s market cycle is perceived to be different due to factors such as growing institutional demand and Bitcoin hitting an all-time high before halving. Patel discusses the evolving nature of market cycles, noting that we are currently in Bitcoin’s fifth market cycle. He expects that this ongoing cycle will further drive Bitcoin prices upward, potentially reaching $100,000 by the end of the year.
2024 is also the year of Bitcoin ETFs, with the US approving multiple spot ETF products for Bitcoin. This approval is seen as a key driver behind Bitcoin’s recent surge. Patel believes that these instruments make Bitcoin investment more accessible, expanding the investor base.
The Indian market’s response to the Bitcoin halving is expected to mirror the global trend but with local nuances. The reduced supply and the prospect of increased scarcity are likely to enhance Bitcoin’s appeal to Indian investors, potentially leading to further adoption.
Sumit Gupta, co-founder of CoinDCX, shares similar views on the role of Bitcoin ETFs in boosting adoption. He believes that the arrival of Bitcoin ETFs has garnered significant attention, particularly from institutional investors in the US. Their entry is considered a major endorsement, providing legitimacy that many investors have been waiting for. This could encourage further investment and broader market participation.
Gupta predicts that these financial instruments will catalyze a substantial increase in market activity within India, resulting in increased transactions and volumes as the sector continues to evolve.
Rahul Pagidipati, CEO of Zepay, remains optimistic about the growth of the retail sector in the cryptocurrency market following the halving. He attributes this potential increase to anticipated reforms in the taxation framework, which is currently seen as a deterrent to wider adoption in India.
Despite the high capital gains tax on crypto, the Indian retail market has shown incredible resilience and continues to grow. While there is hope for a reduction in capital gains tax and TDS on crypto, participation from the retail market is expected to increase due to the Bitcoin halving event.
