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The value of Bitcoin hit another all-time high of $6,500 on Wednesday, growing faster than any other asset class in the world in the last one year. Despite concerns over regulatory issues, adoption of Bitcoin is skyrocketing in India.
“Over the past 12 months, we’ve seen unprecedented activity and growth in India,” Nicolas Cary, Co-founder and President at the world’s largest Bitcoin exchange, Blockchain, told BusinessLine .
Blockchain, whose name can often be confused with the technology behind Bitcoin, has over 16.5 million wallets, storing digital currencies like Bitcoin and Ethereum.
Cary, who started his career in India about a decade ago as a teacher, feels India will soon be the biggest market for digital currencies.
“We think India could be the most significant market in the world for digital financial services. Within the next five years, it can potentially be bigger than that of the US.
“The reason for that is you’ll have a young population, there’ll be hundreds of millions of young adults entering the workforce here that have smartphones that can be used to download apps and participate in economic activities which was not possible in the past as they could not be served by traditional financial services,” Cary said.
User base ballooning The local Bitcoin exchanges echo a similar sentiment. Zebpay, one of the largest Bitcoin exchanges in India, is seeing user base of the crypto-currency double every three-four months.
“India currently does about 1 per cent of global Bitcoin volumes but the growth has been phenomenal. We’ve seen our volumes double every three-four months. We have about 15 lakh users currently and adding two lakh users a month,” said Saurabh Agrawal, CEO and Co-founder of Zebpay.
Agrawal said that the opportunity for Bitcoins in India is still waiting to explode as many users are hesitant to invest because of lack of clarity on the regulatory aspect. Once the government provides some clarity on that, the growth can be exponential.
“Awareness levels are at an all-time high in Bitcoins in India. We are seeing people from all walks of life and from small towns to big cities investing in Bitcoins,” Agrawal said.
On Tuesday, Chicago Mercantile Exchange announced its plans to launch a Bitcoin exchange by end of the year, triggering further confidence in the crypto-currency and leading to another all-time high. Bitcoins have grown nearly ten-fold in the last one year from about $700 to $6,500.
Cary calls Bitcoin and Ethereum anti-fragile currencies. “What’s interesting about Bitcoin and Ethereum is that they are known as anti-fragile currencies, which means when everything else is going down, these go up. And when all the other economies go up, these also go up typically because there’s more money to invest.
“So, it is a good way for consumers to diversify and de-risk out of current currencies and assets where they have lack of confidence,” he said.
Blockchain has already signed its first partnership with Indian Bitcoin exchange Unocoin, wherein the latter will allow Blockchain users to encash their Bitcoins in India and handle their KYC documentation.
However, Agrawal warns that Bitcoins do come with its own set of risks and people should not invest more than they are willing to lose.
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