Surge in Cryptocurrency Trading Volume Driven by Smaller Cities in India

NAGPUR, India, Feb 25 (Reuters) – The trading landscape in India is undergoing a significant transformation as the cumulative trading volume on the country’s four largest cryptocurrency exchanges has more than doubled, fueled primarily by interest from smaller cities. The recent shift in trading patterns sees many young Indians, particularly from non-metro areas, turning to cryptocurrency for its potential as a lucrative investment option amid increasingly stringent regulations on traditional stock options.

Shift Toward Cryptocurrencies

For Ashish Nagose, a 28-year-old flower shop owner in Nagpur, the shift to cryptocurrencies has become a lifeline. After spending two months learning about crypto trading in local classes, Nagose finds himself attracted to the prospects of digital currencies as a means to stabilize his family’s business during slower sales periods, such as the post-Diwali lull.

"I want to run my family shop, and hope that trading can provide a steady income when business slows down," Nagose explains, surrounded by vibrant flowers that symbolize hope and renewal.

According to data collected from CoinGecko, trading volumes for cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin surged to an impressive $1.9 billion in the October-December quarter, illustrating the changing dynamics of the Indian trading market.

Young Traders and Economic Realities

The rising interest in cryptocurrency trading reflects a larger trend among India’s youth. With nearly two-thirds of the nation’s 1.4 billion people under the age of 35, many younger traders are seeking out alternative streams of income as job growth and pay increases have not kept pace with India’s rapid economic expansion.

Edul Patel, co-founder of the Indian crypto exchange Mudrex, notes that the excitement is partly fueled by global events, such as the recent election of U.S. President Donald Trump, which has altered perceptions and regulatory approaches toward cryptocurrencies worldwide.

"There’s a lot of curiosity at the ground level… especially with Trump becoming the U.S. president and the flavor of crypto changing globally," Patel remarks.

In line with this growing trend, the cryptocurrency market in India is projected to expand remarkably, with estimates suggesting it could reach over $15 billion by 2035, up from $2.5 billion last year, according to Kush Wadhwa, a partner with consulting firm Grant Thornton Bharat. The majority of this interest has come from retail traders, further driven by the dynamic nature of global pricing trends.

A New Frontier in Trading

Notably, cities like Jaipur, Lucknow, and Pune have emerged as unexpected centers for crypto activity, challenging the traditional dominance of metropolitan areas. Balaji Srihari, vice president at CoinSwitch—an Indian crypto platform with 20 million users—notes the noticeable trend of growth being spurred predominantly by traders in non-metro regions.

"The growth is now being driven by non-metro cities. That’s true for the stock world and it’s true for crypto," he says.

Educational institutions like the Thoughts Magic Trading Academy in Nagpur have sprung up to cater to this burgeoning interest, providing aspiring traders with the tools and knowledge necessary to navigate the risks associated with cryptocurrency markets. Yash Jaiswal, who runs the academy, has been instrumental in teaching approximately 1,500 students over the past two years.

Regulatory Landscape Remains Unclear

Despite the growing enthusiasm for cryptocurrency, uncertainty looms over the regulatory environment. India has one of the highest tax rates for cryptocurrency trading gains globally, yet it has not established clear rules for the asset class. Unlike most G-20 nations, India has neither integrated cryptocurrency into existing securities regulations nor has it imposed a complete ban.

The Reserve Bank of India has consistently warned about the potential risks associated with cryptocurrency usage, citing concerns over macroeconomic and financial stability. The government remains divided, with previous reports indicating that the market regulator is open to providing oversight, although a definitive stance on regulations is yet to be taken.

As India continues to grapple with the complexities of cryptocurrency, traders like Sagar Neware—a mechanical engineer from Nagpur—remain undeterred. Neware, hoping to rejuvenate his father’s failed business through cryptocurrency, shows how deeply personal aspirations are intertwined with this speculative venture.

"My father had to shut down his plastic packaging business a few years back, so my first dream is to restart it with the money I can earn from trading," Neware expresses, highlighting the motivations driving many in this new wave of investors.

As the Indian crypto landscape evolves, the intersection of economic necessity and the quest for financial autonomy paints a vivid picture of a nation stepping into a new era of trading possibilities.