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Cryptocurrency trading volumes of some Indian exchanges dropped by as much as 72% just 10 days after the country had implemented an aggressive tax law, CoinDesk reported Monday, citing data from digital asset research firm Crebaco.
At the beginning of February, India’s Finance Minister Nirmala Sitharaman said the country will impose a 30% tax on cryptos and non-fungible tokens on April 1. In addition, the 1% tax deducted at source (“TDS”) liability will come into effect on July 1, Coindesk noted.
Four Indian exchanges in particular saw large drawdowns in trading volumes, with WazirX’s volume off 72%, ZebPay -59%, CoinDCX -52% and BitBns -41%, according to data from CoinMarketCap and Nomics, as reported by CoinDesk. Month-to-date, bitcoin (BTC-USD) is off nearly 9%.
“April 1, 2, and 3 were holidays. Since then volumes are continuing to fall. I don’t think this will return,” Sidharth Sogani of Crebaco told CoinDesk. “This has created a new benchmark. It can go further down or sideways but it is unlikely to go back up. It is clear that the new tax has impacted the market negatively. The government must look into this and because there is no way to stop this (crypto), the government should embrace the technology,” he added.
Looking at intraday crypto prices, bitcoin (BTC-USD -4.8%) is dipping toward $40K, a key level of support, recently changing hands at $40.7K. Ethereum (ETH-USD -8.0%) is nosediving to roughly $3K.
Previously, (Feb. 23) an India regulator revealed crypto advertising guidelines to “safeguard consumer interests.”
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