The bull run on Bitcoin has breathed some life into Indian exchanges with trading volumes on the top exchanges touching a ten-month high in February.

According to data shared by Crebaco, a cryptocurrency research firm, Indian exchanges, CoinDCX, WazirX and BitBNS traded $2.6 million, $3.4 and $7.8 million, respectively, in crypto currency in February clocking their highest ever volumes since June 2023. However, the volumes are still way short of their historic peak in 2021. 

“The uptick in trading volumes on our exchanges is driven by the improvement in sentiment and demand globally. 2024 will be the year of crypto, although the Centre’s tax regime will dampen the volume on Indian exchanges,” said Rajagopal Menon, Vice-President at WazirX. 

Bitcoin is currently trading at $65,000 — around six per cent lower than its all-time high reached in November 2021. 

The cryptocurrency’s surge in demand is driven by new exchange-traded funds purchasing it at a rate far surpassing the willingness of long-time holders to sell their Bitcoin. The largest cryptocurrency by market value has gained 50 per cent this year and most of the rise has come in the last few weeks where inflows into the US-listed bitcoin funds have surged.

This bull run is expected to sustain as Bitcoin goes through a halving cycle in April 2024, which could potentially increase the demand as well as the price for Bitcoin even further. 

The recent improvement in global market sentiment towards this currency has led to a slight increase in trading volumes on Indian exchanges. These exchanges have struggled with low trading volumes since the bear market of 2022-23, compounded by the Centre’s imposition of a 30 per cent tax on cryptocurrency trading.

“Deposits increased by 80 per cent in last 3 months compared to previous three months.There was 100 per cent increase in total transactions across platform in last three months. There was also a 200 per cent increase in signups during the same period,” Menon added.