India's cryptocurrency industry reels as new tax hammers trading

economictimes.indiatimes.com:

cryptocurrency tax has dealt a heavy blow to the country's crypto exchanges, adding to broader sectoral woes and sending trading volumes plunging by up to 90%. The 1% tax on Indian cryptocurrency trades from the start of this month has been a further disincentive for investors in a market where a burdensome regulatory regime and a 30% digital income tax had already knocked volumes by 60-70%, traders and industry executives said. «We are scraping the bottom of the barrel as far as volumes are concerned,» said Rajagopal Menon, vice president of the WazirX crypto exchange.

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In the wake of the crypto market crash, the prices of hardware used to support the mining of crypto assets are also falling dramatically. For example, a high-end graphic card is now almost 45% cheaper compared to its price a few months ago.

«The amount of regulatory tangles, lack of ease of doing business and paperwork that has been created on every single trade has made investors and traders wary and we are seeing that people are moving to international exchanges or to the grey market.» While Indian exchanges have been hit, trading volumes globally have edged higher as prices of cryptocurrencies have come down. Top-tier exchanges traded a maximum daily volume of $137 billion when the bitcoin price fell sharply on May 11, up 84% from April, specialist research company CryptoCompare said in a report. Bitcoin, the world' largest cryptocurency, has had the worst quarter on record, with the price down 56% and the outlook still challenging… Lower trading volumes have dragged down revenues for Indian exchanges, which have cut back on marketing and hiring while formulating strategies to ride out any protracted downturn.