“It’s worth noting there’s a flight towards quality crypto in the market. The Bitcoin dominance has climbed to 45%, suggesting investors have moved capital from lesser-known coins to quality crypto,” says Ashish Singhal, Co-founder and CEO, CoinSwitch
The crypto market, with no doubts, is in a tight bear grip. How do you see this phase and how long can it sustain? Do you think the Indian market and investors are mature enough to handle the long crypto winters?
The supersized hike by the US Fed to control inflation has impacted the capital markets – be it traditional equities or cryptos. With capital becoming expensive, it was inevitable the markets would be bearish as investors temper their risk appetite.
It is worth noting the strong correlation between Bitcoin and Nasdaq Composite, suggesting investors are valuing crypto assets in the same breath as deep tech stocks. We also have to keep in mind that asset classes such as cryptos are coming off a multi-year bull run. Course correction is thus understandable.
The fundamentals of crypto, however, remain strong. The true power of cryptos is the underlying technology—blockchain—which will be the foundation of the new internet, or Web3.
Today, the sentiments are bearish, but this is a phase in the market cycle and won’t be permanent. History has shown that companies that have put their head down and built during the bear market have emerged stronger.
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During the dotcom bubble, internet stocks crashed and some companies failed. But that did not stop the progress of technology. It did not stop the internet from reshaping the world. Companies that built through that bear market and focussed on their product have reaped the benefits later on. Amazon and Apple are examples.
Today, we are building a new internet. The bear market does not change this prospect. I would say, this is the best time to build. While weak companies may perish, good companies with the right product-market fit and the right business-market fit will only emerge stronger.
How long will this bear market last? This would be influenced by macroeconomic conditions. The silver lining is that India’s economic outlook is better than its Western counterparts. As far as investors are concerned, the emphasis should be on research and understanding the space.
The crypto industry is facing a double whammy of recession fears and regulatory turmoil. Where are the crypto markets – not just in India, but on a global level – headed? Do you think a sound regulatory framework can trim the bear phase?
Regulatory peace and certainty will protect investor interest. Ambiguity, on the other hand, introduces additional turbulence into the already rough markets as this does not help. A global consensus on forward-looking, technology-neutral policy will enable the industry to grow and responsibly innovate and protect investors.
The crypto market has already attracted investments worth trillion dollars. While the industry has implemented best practices and emphasizes on user education, comprehensive regulations will instill confidence in investors and provide the guardrails required to protect their investments. The market has decided crypto is an asset class. Regulators should follow.
On a global macro-economic level, we are in uncharted territory. The US and the Western world is witnessing decades-high inflation following the pandemic stimulus. The interest rate hikes to counter this will weigh down the capital markets.
The silver lining here is India is expected to fare better, according to projections by the IMF and other institutions of repute. There is no fear of recession in India. The Indian economy, in fact, is projected to grow by 7.5% in the current financial year.
There has been a severe wealth erosion in the crypto market. Do you think this has dampened the investment sentiments and new investors will be more watchful while entering the markets?
The bear market could lead to maturity in the crypto space. The multi-year bull run that we have had for a few years could sometimes lead to market exuberance. We have seen the same with traditional equity markets, too. Market corrections are an opportune moment to refocus on the fundamentals. I believe this phase will help users realize crypto, or any investment class for that matter, is not a get-rich-quick scheme.
It’s worth noting there’s a flight towards quality crypto in the market. The Bitcoin dominance has climbed to 45%, suggesting investors have moved capital from lesser-known coins to quality crypto.
The long-term potential of crypto remains strong. The technology has crossed a threshold to take a U-turn. We are well on the way to building new use-cases that solve user problems. Decentralized finance and Web3 put power back in the hands of the users. Bear markets are temporary, Crypto is here to stay.
Are the volumes of the Indian crypto industry hurt due to this downtrend? Also, what is your take on the latest lay-off from the industry? Has this anything to do with the volumes and trading revenue? What are your staffing plans?
This bear run has left no market untouched — equites, cryptos, bonds have all been impacted. Volumes in the Indian crypto market resemble the global trend.
CoinSwitch has always been frugal even when we made big, bold bets. We have a well-thought-through roadmap to be the one-stop wealth tech destination for India — to make money equal for all.
We are going to always put people first as we move into our next phase of growth. We will honor the offers we have made; our job is to stay focused, clear out the noise, and continue to build. Only the daring will survive this.
July 1- the TDS cutoff date- is approaching. Do you think it will further weaken the already bleak sentiments for the crypto industry in India? Or can it be a blessing in disguise for the industry? Are you still upheld with your request of reducing it to 0.1% or 0.01%?
As the timeline of July 1st is fast approaching, users are most anxious about the ambiguity around the implementation of TDS. As an industry leader, we continuously work with regulatory bodies and the government in bringing clarity to our users on these issues to ensure a smooth implementation. We are hopeful the government will provide more clarity on these issues soon.
What are your future plans? Are you holding them back to await the regulatory framework or working according to your own checklist? Where do you see the Indian crypto industry in the next 3-5 year or even 10 years down the line?
The bear market is temporary and cryptos is here to stay. There is no holding back. We will be in India, make in India, for the world. India has the talent density, startup ecosystem, and user adoption. What better place to build if not India.
At CoinSwitch, we strongly believe that some of the biggest companies of today were built in the bear markets of yesteryears. Our journey since 2017 has not been without difficulties. Crypto market is not new to downcycles. In India, the market has endured the shock of 2018. Between then and now, the market has only grown, with more innovations, use-cases, and investors.
Through all these downcycles, we have continued to build and improve our product, keeping users at the center of all our decisions. Today, over 18 million registered users trust us to make crypto investments.
We will continue to build through this bear market as well. We remain bullish. We strongly believe that India has the potential to lead this massive technological shift unleashed by xryptos, and we want to play an active role in shaping the future. The technology that enables a shared and open flow of value, crypto tokens, can also be leveraged to reshape the internet infrastructure.
While India has built successful internet-based products and services, its influence and ability to shape the foundations of today’s internet is limited. Web3, based on open-source protocol and shared ownership, changes this.
It is our firm belief that India can be the driving force of this change. India has the talent pool, internet users, entrepreneurial ecosystem, and capital. Crypto truly can be a force multiplier for India.
CoinSwitch intends to become a wealthtech platform. What is the progress on that front? What asset classes are you planning to put under one roof? What is the thought behind this umbrella approach?
A lot of Indians started their investing journey with Crypto. We want to grow with them, provide them with the right assortment of asset classes, simplified and tailored for their needs. We have an amazing team building our new initiatives. You will hear more about these new initiatives in the coming quarter