Since the start of 2024, India has witnessed an influx of demand for cryptocurrencies, with exchanges recording notable surges in trading volumes.
Indias are warming up to the emerging digital asset sector despite the lack of proper regulations and a hefty tax on crypto gains.
As anticipation builds for Bitcoin’s next halving in April 2024, the cryptocurrency community, especially in India, seem to be observing the potential impacts on market dynamics and investor behaviour.
According to Edul Patel, CEO & Co-founder of Mudrex, data suggest a complex interplay of market forces post-halving.
“In the past, Bitcoin’s price typically surged after halving events, followed by a correction. However, this time, Bitcoin has already hit a new record high, signaling a potential correction around the halving,” Patel told crypto.news.
Historically, halvings have been catalysts for bullish cycles. However, this year, external factors such as growing institutional demand and Bitcoin hitting an all-time high before halving for the first time have led many to believe that the current market cycle is different.
Patel discussed this evolving nature of market cycles, noting that “we are currently in Bitcoin’s fifth market cycle.” Highlighting historical trends in Bitcoin’s market behavior, he observed that each cycle typically extends beyond the duration of its predecessor. Based on this trend, he anticipates that the ongoing cycle will further propel Bitcoin prices upward as the extended market activity aligns with enhanced price trajectories over time.
“There’s a strong likelihood that the bull market will persist after the halving, possibly pushing Bitcoin’s price to $100,000 by year-end,” Patel added.
2024 is the year of Bitcoin ETFs, with the U.S. approving multiple spot ETF products for Bitcoin. This approval has been touted as a key propellent for Bitcoin’s recent surge. According to Patel, these instruments make Bitcoin investment more accessible and thereby expand the investor base.
The Indian market’s response to the Bitcoin halving is also projected to mirror the global trend but with local nuances. The reduction in supply and the prospect of increased scarcity are expected to enhance Bitcoin’s appeal to Indian investors, potentially catalyzing further adoption.
“Historically, Bitcoin halving events have been associated with bullish sentiment and upward price movements globally, driven by the anticipation of reduced supply and increased scarcity. This could translate to a similar trend in the Indian crypto market, with investors viewing the halving as a bullish signal and increasing their exposure to Bitcoin,” Patel added.
Sumit Gupta, co-founder of CoinDCX, voiced similar opinions regarding the role of Bitcoin ETFs when it comes to boosting adoption.
“The long-awaited arrival of Bitcoin ETFs has garnered immense attention, particularly from institutional investors in the US. Their entry, considered a major endorsement, has propelled the industry forward by providing a level of legitimacy many investors have been waiting for. This, in turn, could encourage further investment and broader market participation,” Gupta told crypto.news.
He predicted that these financial instruments would catalyze a substantial increase in market activity within India, leading to heightened “transactions and volumes” as the sector continues to evolve.
This surge, propelled by the optimism around the halving, will be backed by the “availability of reliable exchanges in the Indian market and widespread knowledge dissemination,” Zepay CEO Rahul Pagidipati told crypto.news.
Pagidipati remained optimistic about the growth of the retail sector in the cryptocurrency market following the halving. He attributes this potential increase to anticipated reforms in the taxation framework, which is currently touted as a “deterrent” to wider adoption in India
“The Indian retail market has shown incredible resilience despite the high capital gains tax on Crypto, and it continues to grow. While we hope to see capital gains tax and tds reduced on Crypto, we anticipate an increase in participation from the retail market because of the Bitcoin halving event.”
