The slogan of cryptocurrency devotees that Bitcoin is equal to digital gold is attracting converts among the world’s largest gold holders. According to Chainalysis, crypto investments in India increased from roughly $200 million to nearly $40 billion in the last year, with households owning more than 25,000 tonnes of gold. Despite explicit antipathy for the asset class from some quarters, this is the case.
One of the cryptocurrency converts is Richi Sood, a 32-year-old entrepreneur. Since December, she’s invested little more than 1 million rupees ($13,400) in Bitcoin, Dogecoin, and Ether, with some of the money coming from her father. Her timing has also worked out well for her. She sold a portion of her Bitcoin holdings when the price hit $50,000 in February, then re-invested following the recent decline. According to the co-founder of India’s first cryptocurrency exchange, the 18-35 year old generation is driving growth in the country. According to the World Gold Council, Indian adults under the age of 34 have a lower desire for gold than older consumers. “They find it considerably simpler to invest in crypto than gold because the process is quite simple,” said Sandeep Goenka, co-founder of ZebPay and a long-time representative of the cryptocurrency.
Regulatory ambiguity is one of the most significant impediments to wider adoption. Last year, the Supreme Court overturned a 2018 rule prohibiting banking companies from trading cryptocurrency, causing a spike in trading.
Authorities, on the other hand, show no evidence of accepting cryptocurrency. The country’s central bank has expressed “serious worries” about the asset class, and the Indian government suggested a ban six months ago.
To be sure, India’s digital asset holdings are a fragment of the country’s gold market. Still, there is evidence of growth, particularly in trading: according to CoinGecko, daily trade on the four largest crypto exchanges increased to $102 million from $10.6 million a year earlier. According to Chainalysis, the country’s $40 billion market is much smaller than China’s $161 billion.