Since the beginning of this year in the markets around the world, the effect of the recession has also been seen in the crypto market. In the year 2022, some new rules related to crypto have also come into force in India. These include a 30 percent tax on crypto income and a provision of 1 percent TDS in crypto transactions.
In the year 2021, the cryptocurrency market saw a growth of 15 and a half percent as compared to 2020. While Indian investors invested just US$28.10 million in cryptocurrencies in 2020, this increased to US$438.18 million in 2021. In the past six months to the year 2022, approximately $139.9 million has been invested in cryptocurrencies.
Since the beginning of this year in the markets around the world, the effect of the recession has also been seen in the crypto market. Due to the weakness of cryptocurrencies in the market for some time now, a large number of Indian investors are also seen withdrawing money from it. This has started a debate in the market about whether the days of cryptocurrencies in India are over or will NFTs or cryptocurrencies return to the market once again?
In the year 2022, some new rules related to crypto have also come into force in India. These include a 30 percent tax on crypto income and a provision of 1 percent TDS in crypto transactions. Experts believe that its impact is being seen on the data of investment in cryptocurrencies. According to ZebPay CEO Avinash Shekhar, due to the implementation of the new rules, the number of investments in cryptocurrencies and related startups has come down.
According to data from the World Economic Forum, the cryptocurrency sector saw an increase of 187.5 percent in total market capitalization in the year 2020. Of the entire cryptocurrency market, bitcoin alone gave a return of around 60% (59.8%).
Investments in the NFT (Fungible Token) and Metaverse markets have been made with investments of US$65 million and US$0.84 million in the year 2021 respectively. Looking at these investments, it can be guessed that the confidence of the investors in this sector remains.
According to a study by NFT company nonfungible.com, the overall scenario of investment in NFTs has seen a growth of 21000 percent in the year 2021.NFTs and Metaverse also allow users to keep proof of ownership on the blockchain. According to Ramkumar Subramaniam, CEO and Co-founder, GurdianLink, the year 2021 will see multiple forms of NFTs in the Indian digital market. During this time, Indian celebrities and brands have also openly advocated NFT and Metaverse culture.
Market experts believe that the year 2022 may see more utility-oriented and user-oriented projects in the NFT and metaverse markets. The concept of Play to Earn will also have an effect. The influence of NFTs and the metaverse can also be seen in many government initiatives.
On the other hand, if we talk about the global markets, in the year 2021, investments of $ 14270.38 million, $ 5005.67 million, and $ 661.33 million have been seen in the cryptocurrency, NFT, and metaverse markets respectively. Nilesh Jehangirdar, Vice President of Marketing, Xcube Labs, a software company associated with the crypto market, believes that to establish India as a leader in the global market, there is a need for more investment in Blockchain technology. He believes that the announcements made in the budget of the Government of India in the year 2022 regarding digital currency have given hope to increasing the market of digital currency in India in the coming days.
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So we can say that even though investors are currently withdrawing money from the crypto market due to the fear of global market volatility, it is expected to come back as soon as the market improves. Coming to the metaverse, the Indian market is yet to become a virtual hub for its purchases and transactions. However, there is also a side of this whole discussion that till now no clear policy regarding NFT has been made public by the government and the central bank Reserve Bank of India. Recently RBI Governor Shashikant Das has said that cryptocurrencies are dangerous.
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