India ranked second in terms of crypto adoption worldwide behind Vietnam but ahead of countries like the US, UK and China, as per the 2021 Global Crypto Adoption Index by blockchain data platform Chainalysis.
Worldwide crypto adoption grew by 880% during the year, the report said.
A report by US-based research platform Finder this month corroborated that the top five countries in terms of crypto adoption were all from Asia. The company surveyed 47,000 users worldwide and 30% of those surveyed in India said they owned cryptocurrencies. According to the report, Bitcoin is the most popular coin to own in India, followed by Ripple, Ethereum and Bitcoin Cash.
Finder said its “huge expatriate population” makes India the world’s number one remittance recipient in the crypto space. A January 2021 report from the United Nations noted that India had the largest expatriate population in the world, with 18 million people from the country living outside their homeland last year.
However, crypto adoption in India has also been led by smaller towns in the country. The largest crypto exchange by trading volume, WazirX, said last week that it had seen over 2648% growth in user signups from Tier II and Tier III cities in India. The exchange has a claimed user base of 7.3 million users and said it has clocked over $21.8 billion in trading volumes this year.
Competitor Coinswitch Kuber, which ranks amongst the top crypto exchanges in India by trading volumes, also noted the same trend. The company saw 135% monthly growth in user sign ups from smaller towns, and it made up 61% of the exchange’s total business. Sharan Nair, chief business officer (CBO) of the company, said trading volumes from these cities in the last six months amounted to close to Rs. 431 billion.
Naimish Sanghvi, who has been running a crypto information platform called Coin Crunch since 2018, said the interest is mostly driven by referrals. He said that the fact that cryptocurrencies have made money for many individuals almost overnight has drawn more such users to the space, especially from smaller towns. However, serious investors who will get in the space for the long term are yet to really take interest.
“Young adults are the most likely to own cryptocurrency with 32% of those aged 18-24 having invested in cryptocurrency, followed by 29% of those 35-44, 27% of those 45-54 and 25% of those aged 25-34 and 55-64,” the Finders report cited above stated.
The growth in crypto adoption also clashes with growing venture capital (VC) interest in crypto companies. According to data from Delhi-based data intelligence platform VCC Edge, 13 deals worth over $176.9 million have been completed in 2021 so far, more than double of the 10 deals worth $44 million seen last year. Mumbai-based CoinDCX also became the first unicorn from India from the crypto industry.