India’s gold-obsessed investors are flocking to cryptocurrency

Among the world’s biggest holders of precious metal, cryptocurrency aficionados believe Bitcoin is equivalent to digital gold.

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According to Chainalysis, crypto investments in India grew from about $200 million to nearly $40 billion in the past year, where households own over 25,000 tonnes of gold. Despite the central bank’s hostility and a proposed trading ban, the asset class continues to be popular.

One person who made the switch from gold to crypto is 32-year-old Rishi Sood. Since December, she’s put in just over 1 million rupees ($13,400)–some of it borrowed from her father–into Bitcoin, Dogecoin and Ether.

She is fortunate to have been born at the right time. The founder of Study Mahe India, a startup that offers education abroad, cashed out some of her cryptocurrency positions when Bitcoin crossed the $50,000 mark in February. After the plunge, she got back in and funded the growth of her startup.

Instead of gold, Sood said, he’d rather put his money in cryptos. The return on cryptocurrency is faster than gold or real estate, and the transparency of cryptocurrency is greater than gold or real estate.”

Over 15 million Indians now buy and sell digital coins, according to the BBC. The United States has 23 million traders of these assets compared to the United Kingdom with 2.3 million.

An expert with the first cryptocurrency exchange in India says cryptocurrencies are growing mainly among the 18-35-year-old cohort, according to World Gold Council data. Indians under the age of 34 are less inclined to purchase gold compared to their older counterparts.

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Sandeep Goenka, who co-founded ZebPay, said investing in cryptocurrency is easier than investing in gold because the process is straightforward.

Supreme Court decision allowed financial institutions to trade cryptocurrency last year, resulting in a boom in crypto trading.

Indian authorities have yet to embrace cryptocurrencies. The central bank says it has “major concerns” about the asset class, and the government proposed banning trading in digital coins six months ago – although it hasn’t taken action since.

Risk-taking is in my nature, so I will take a chance on being banned.”

Regulations are tougher in other countries as well. Binance Markets Ltd. has just been prohibited from doing any regulated business in the United Kingdom.

The official hostility toward the big investors is making it difficult for them to discuss their holdings openly. Bloomberg spoke to a banker who invested more than $1 million into crypto assets and was worried about potential tax raids if something publicly knew him to be a big-ticket crypto investor.

As a result, he has already developed contingency plans in case a ban was to be introduced.

Although its digital asset market represents a fraction of the gold market, the value of Indian digital assets remains substantial. The growth in crypto exchanges is clear, especially in trading — the four biggest exchanges saw their daily trading jump to $102 million from $10.6 million a year ago, according to CoinGecko. Chainalysis estimates China’s market size to be $161 billion compared to Pakistan’s $40 billion.

At least for now, the increasing adoption is another sign of Indians’ willingness to take risks in a regulated industry.

I expect it to take off soon in every country, said Keneth Alvares, 22, an independent digital marketer who has already invested more than $1,300 in crypto. “At the moment the regulation is terrifying, but I don’t mind because I don’t plan to do anything about it.”

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