WHERE ARE THE CRYPTO KINGS?

CRYPTO TRADING HAS SLOWED DOWN DRASTICALLY, PUTTING THE BRAKES ON A MARKET WHICH WAS ONCE ON FIRE. UNDETERRED, CRYPTO FOUNDERS ARE LOOKING FOR NEW AVENUES TO TAKE THEIR FIRMS IN

- TEENA JAIN KAUSHAL

THE YEAR WAS 2021. Terms such as crypto, blockchain and NFT had captured the popular imagination. The value of Bitcoin, the most popular crypto asset, rocketed to a peak of almost $69,000 in November. Indians, too, couldn't resist the charms of this digital currency, with an estimated 100 million-plus trading in cryptos-the highest in the world, per broker discovery and comparison platform BrokerChooser. In fact, a 2022 report by trade and the United Nations Conference on Trade and Development (UNCTAD) said that more than 7 per cent of the Indian population owned cryptocurrencies in 2021. The year also saw crypto exchanges flourish in the country with their trading volumes growing and their founders being the toast of the town.

Cut to 2023, and Bitcoin has plunged to about half its value from the peak in 2021 and trading volumes for crypto exchanges in India have plunged more than 90 per cent since February 1, 2022. What happened? First, Finance Minister Nirmala Sitharaman imposed a 30 per cent tax on crypto gains and a 1 per cent tax deducted at source (TDS) on all 'sell' transactions on February 1, 2022. And second, Bitcoin plunged after the failure of some prominent crypto exchanges like FTX and the end of an era of ultralow interest rates. Is crypto a dead asset class then?

While crypto has lost its sheen as a popular investment option, there are some financial bodies that still believe in them. For instance, Standard Chartered Bank has predicted that Bitcoin could touch $120,000 by the end of 2024. But there are many who are sceptical about this asset class, like the legendary Warren Buffett. The Oracle of Omaha famously said at Berkshire Hathaway's annual meeting in 2022 that if someone offered him all the Bitcoin in the world for $25, "I wouldn't take it, because what would I do with it?"