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India Crypto Market Analysis Report: Rapid Growth Under Regulatory Uncertainty

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SocialFi and GameFi may be key drivers

Original Title: "India Crypto Market Analysis Report"

Original Author: Rex, Waterdrip Capital

India country basic information

According to Sohu News, India's land area is about 2.98 million square kilometers, ranking seventh in the world and about one-third of China's land area. As the seventh largest country in terms of land area, India ranks second only to China in terms of population in the world.

according to the latest wiki According to Wikipedia data, India has a population of 1,401,500,000, second only to China's 1,412,600,000, accounting for 17.58% of the world's population.

According to 2021 data, India's total GDP The volume is 3.08 trillion US dollars, ranking sixth in the world in terms of GDP. At its peak, India also ranked fifth in the world in terms of GDP in 2019.

According to 2021 data, India's Gross Enrollment Ratio (GER) for the 18-23 age group was 26.3% in 2018-19, Increased to 27.1% in 2019-20. The education level of young people is gradually improving.

India has a natural population advantage, and there are many other advantages including geographical advantages, English language and cultural advantages, rapid development of the elite class, and great potential for economic development And so on, but at the same time there are many disadvantages, these disadvantages include the economy is heavily dependent on industry, but industrial development is backward, land problems in India (national land acquisition is limited), severe regional fragmentation (including language, industrial development), weak infrastructure (road traffic , hydropower, network, etc.), the level of mass culture and education is generally low, foreign investment power is very limited (competition in Southeast Asia such as Vietnam, Indonesia, Malaysia, etc.), the general Jugaadism/makeshiftism of the Indian people, religious issues, political management, etc. wait. The doping of these complex factors has greatly affected the domestic situation and development in India. In terms of economic development, India often gives people expectations because of its population size, and it is often able to break this expectation.

Recent crypto-related news

The Deputy Governor of the Reserve Bank of India believes that StablecoinMore threat than cryptocurrency

Indian cryptocurrency trading platform WazirX was frozen by Indian authorities

News report released by Binance on 8.23:

Blockchain investors in India are building their alliances and expanding their influence

9.12 He Yi: India is the "key market" of Web3

Binance Co-Founder & "https://economictimes.indiatimes.com/">The Economic Times" stated that India will be a "key market" for Web3 with the rapid development of the ecosystem of entrepreneurs and development talents p>

About Crypto in India

Interpretation of current situation/data supplement

G20 national crypto regulatory map

We can see that India has not yet started the regulatory process. Currently it is still a gray area

According to CZ Changpeng Zhao’s view on the Indian market in 2022:

Three key points that the Indian market needs to focus on: regulatory clarity and compliance (crime, laws and regulations), rapid innovation (metaverse, gaming, etc.), explosive growth in the DeFi field Development (financial attributes). In CZ's view, SocialFi and GameFi will be the key drivers in the future

The article mentions: According to the Nasscom report, by 2030, the Indian encryption technology market will The value is expected to reach $241 million, potentially creating 877,000 jobs. Retail investors are estimated to invest $15.6 billion in crypto in 2030, up from $6.6 billion today.

According to Coinpaprika&OKE's interpretation of the status quo of India's digital currency ecology:

India has a very large demand for cross-border remittances, the demand for foreign currency/stable legal currency brought about by the continuous depreciation of local legal currency, and the uncertainty of policies

These This point makes India more suitable for the crypto field than many regional countries, especially in the field of defi, Stablecoin and other fields have very large demand. At the same time, the article mentions that countries such as Argentina and Venezuela where the purchasing power of fiat currency has depreciated sharply may also have the same demand.

India’s official announcement about Crypto

The Indian government has repeatedly conducted "Warning", the Indian government has always maintained an unfriendly attitude towards the financial attributes of cryptocurrencies. However, India has made policy arrangements for Tax early:

After April 1, 2022, Cryptocurrencies and other digital assets will be taxed in income tax tax. The regulations stipulate that the proceeds from the sale of cryptocurrencies will be taxed at a rate of 30%. This will deal a big blow to the cryptocurrency development in India.

but other than that However, the Indian government's attitude towards cryptocurrencies is still unclear, and there are no regulations and regulations on derivative products such as NFT. Neither Illegal is not strictly legal either.

Indian People About Cryptocurrency

According to Visakh Vijayakumar's article reports that India has a staggering 90 million users as of March 2022. Among them, COINDCX is the largest Indian crypto trading platform with more than 40 million users. The second and third Indian trading platforms WazirX and COINSWITCH have 31.7 million and 30.1 million users respectively. Binance has 27.6 million users in India.

This data will of course include repeated statistics, but it is also very amazing. We should more appropriately regard him as the number of accounts. But a single trading platform already has more than 40 million users, which is amazing.

At the same time, it can be seen from the figure below that the growth rate of users in India in the past two years is very amazing, especially in the recent bull market, UV (Unique Visitor independent visitors) growth is staggering.

In the article "Indian Encryption Market: "Attack" after "Closed""

According to Chainalysis' global DeFi adoption index in mid-October 2021 (this index consists of the reception and transfer of Crypto value on the chain, the Measuring three indicators to measure the adoption of Bitcoin and Crypto) shows that among the 154 countries and regions counted, India has ranked second in the adoption of Crypto.

According to the description above, the amount of crypto investment in India is also increasing very rapidly, and most of them come from young people in India. These young people will become the foundation of India's future development.

Games and Gamefi in India

According to Tencent’s strategy to go overseas to India: The Indian game industry is still in its infancy. At present, the Indian game market is dominated by mobile games, accounting for 48% of the overall game market, followed by console games, and the PC game market is the smallest, accounting for only 15%.

The advantages of Indian game development:

The current demographic structure of India has a relatively large advantage for the game industry. Young people under the age of 35 account for more than 65% of the total population. According to the forecast of the demographic statistics agency, this figure will continue to rise in recent years

India's Smartphone users have reached 600 million by 2021, and gamers among them are about 350 million. In 2021, the size of the Indian game industry is close to 1.2 billion US dollars. Although it is still small compared to China, its The scale of the game market has increased by 31.79%, which is amazing.

The Indian game market originated relatively late, so the related industries and companies are not very complete. Large space

Network facilities are developing rapidly, and the mobile terminal will contain great opportunities. It can be compared to the explosion of China's mobile terminal economy. Games are a very important part

The online gaming market in India is developing rapidly, and India can be said to be the largest and fastest growing online gaming market in the world (but basically Monopoly by local companies)

Gamefi field

Due to the successful promotion of Gamefi in Southeast Asia in the last round of bull market, it also had a very important impact on the development of Gamefi in India.

According to New Delhi-based public policy advisor Swati Sudhakaran's opinion:

He believes that due to the rapid development of the metaverse and Web3, it is difficult for India not to be involved. Policies and adjustments in this regard are imminent. The Indian government needs to discuss as soon as possible about the many possibilities that GameFi will bring, as well as the future adjustment and development of related industries.

Indian market issues/risks

Unstable policy factors

Currently vague/unclear policies keep development at risk. India's political environment is special, and there are often erratic policy arrangements. Many executive politicians in India have great opinions on crypto. From time to time there is news about legislation to regulate or ban cryptocurrencies. This shows that the current development in India cannot be said to be optimistic.

The Brain Drain Problem

India until today , there is still a large brain drain. The most important receiving country is the United States. At the same time, India's encryption tax forces local emerging encryption projects to be more inclined to migrate overseas.

India's technology/Internet development is closely related to the United States, but in many cases it cannot help the country.

The consumption habits of users have not been developed, and the market environment is different

The class is obvious, the gap between rich and poor is large, and contradictions have always existed. At the same time, a large number of users do not have the habit of paying. User ROI data in India is not good. At the same time, India's consumption scene and consumption environment are not good, which will limit the development of projects with consumption scenes such as games/metaverse.

The harsh business environment in India has not changed much. (According to the data disclosed in 2015, India ranks below 140 in the international business environment ranking, and the business environment is not even comparable to Iran)

Experience of insufficient credit in past Indian projects

In addition to crypto, India's financing and entrepreneurial history in the international market , has played the role of harvesting many times. There are many cases of high-valued financing and listing that performed poorly. This makes most Indian projects give international investors a very bad first impression.

The political outlook of the country is not good

India Corruption is very common, and overseas investors/entrepreneurs are very easy to be harvested/suppressed. Indigenous projects are very much in need of domestic relationships. This limits the development of DD or some projects. Although crypto is decentralized.

Indian National Currency Issue

Indian National Currency depreciation is severe. The negative impact of high inflation needs to be considered. This important part needs to be considered in the direction of local rupee stable currency, local defi/cefi, etc.