Indian millennials drawn to Bitcoin’s charms

Bitcoin became the talk of the town after Tesla invested $1.5 billion in it, helping take the price beyond $50,000. A host of other hedge fund managers are jostling with each other to invest in the digital currency and, with the launch of an exchange traded fund (ETF) based on Bitcoins in Toronto, the crypto asset is now a mainstream investment product.

What led to the recent frenzy is the dazzling gains recorded by Bitcoin in the last three years. A look at the annual gains made in Bitcoin investments since 2013 reveals that the highest return was made in 2017, when the cryptocurrency gained 1,254 per cent, followed by a crash in 2018 that wiped out 71 per cent of its value. But it has been a stellar run for Bitcoin since then, gaining 96 per cent and 300 per cent in 2019 and 2020, respectively. The dizzying rally since the beginning of 2021 has resulted in a gain of 79 per cent already.

Indian millennials are not immune to the cryptcurrency’s charms: Bitcoin trading platforms in the country report that most of their users are under 30 years of age.

What led to the surge?

“Bitcoin has certainly been the best performing cryptocurrency in 2020, recording an increase of 300 per cent. We also saw Ethereum rise by over 470 per cent,” said Nischal Shetty, CEO, WazirX, a domestic cryptocurrency exchange and trading platform. He added that the pandemic has been the biggest driver of crypto adoption, with people looking at new ways to earn online.

“In 2020, we also saw a lot of institutional investors and hedge funds in the US, and large companies like MicroStrategy, Grayscale and Square, enter cryptocurrencies,” Shetty further noted. “So, the pandemic leading to retail participation, the institutional participation, and the fact that crypto has been growing consistently month-on-month in the past 9-12 months have culminated in what we’re seeing now. There’s huge demand and less supply because a large number of people are holding large amounts of Bitcoin and not selling them.”

CoinSwitch Kuber, another crypto trading platform for Indian users, scaled to 30 lakh users in just nine months of its launch, in June 2020, said its co-founder and CEO Ashish Singhal.

“Investor sentiment has been very bullish over the past few months,” he said, adding that corporates such as MicroStrategy and Tesla investing in Bitcoins also play a vital role. MasterCard also recently announced that it will allow users to transact in certain cryptocurrencies on its network.

Cryptocurrency is also slowly emerging as a mainstream investment class, especially among millennials.

The millennial push

As per a survey report released last November by CoinDCX, another cryptocurrency exchange platform in India, 71 per cent of respondents below 35 years said they have invested in a cryptocurrency at least once.

Shetty said that 70 per cent of WazirX users are less than 30 years of age. He added that the youth are looking at cryptocurrency as an alternative investment option and are increasingly participating in it.

In CoinSwitch as well, Singhal said, 21-27 has been the age bracket that has been actively investing in cryptocurrencies. “They have been investing in legacy coins like Bitcoins and Ethereum, but they are also open to trying new tech coins like Sushi.”

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