Crypto exchanges launch offers to combat up to 99.8% drop in volumes this Diwali

Driven by the 30% flat tax on capital gains from crypto assets and 1% tax deducted at source (TDS) on each crypto transaction, as well as up to 85% fall in digital asset prices, trading activity on crypto exchanges has nearly dried up in India.

The two biggest crypto assets, Bitcoin and Ether, are trading up to 75% lower compared to their all-time highs, while other major tokens such as Cardano and Solana have crashed up to 85% on a yearly basis.

As per data available with CoinGecko, a digital currency price and data platform, on a 30-day period, WazirX has logged a 24-hour trading volume in the range of $1 million to $3 million. Compared to this, the platform had witnessed a 24-hour trading volume of more than $535 million on 28 October 2021.

BitBNS had logged a peak trading volume of over $110 million on 28 October 2021, while the exchange’s last 30-day volume has ranged between $11 million and $15 million.

On its platform, WazirX has launched Shagun and Muhurat offers, wherein users can gain free WRX tokens (WRX) by using the gift card feature and trade crypto on the platform with zero fees for a specific time period during 20-26 October.

Rajagopal Menon, vice president marketing, WazirX, believes that the gift card feature can go a long way in converting no-coiners to crypto users.

Further, WazirX is re-introducing Muhurat Trading this year, under which users can trade Bitcoin, Eether, WRX, Shiba Inu, Dogecoin, and other cryptos for zero fees in all markets of WazirX (rupee, tether or WRX).

Bitbns has launched crypto gift cards option for new users. A selected few will stand a chance to win a cashback, where they will receive BNS tokens.

Moreover, weTrade, a Bengaluru-based crypto startup, has launched an offer where users can refer and earn one USDT (Tether) for each referral.

Colexion, a blockchain-based non-fungible token (NFT) marketplace, is offering new users on its platforms a chance to win prizes.

In India, crypto as a gift has picked up over the last few years with these assets’ prices beating returns from traditional assets.

On a nine-year period (since the data is available on CoinGecko), Bitcoin has delivered a return of 28,139%, while Ether is up 299,496% since its launch in 2015.

Industry executives believe that crypto gift cards can stir up gifting emotions during the festivities, and simultaneously give a higher value for money.

“With Diwali around the corner, we know that people invest in physical assets whose value typically increases in the future. It’s now time for people to not only invest in virtual currencies based on blockchain technology but to leverage the benefits offered by cryptocurrencies as a gift to others that has gained momentum over the years as a valuable asset,” said Sakina Arsiwala, co-founder, Taki, a blockchain-based social network.

With the offers launched during this year’s festive season, the Indian crypto industry is trying to infuse fresh life into crypto activity.

According to Amanjot Malhotra, country head-India, Bitay, a crypto platform, Bitcoin or Ethereum could also be a good form of gift as they are currently on the lower side of pricing.

However, when it comes to gifting crypto assets, there are certain aspects to be kept in mind.

During Union Budget 2022, it was announced that the gift of crypto shall be taxable in the hands of the receiver.

“Based on the changes in Finance Bill 2022, the tax as per the income tax provisions (Section 56) applies to the gift of cryptocurrency too. Therefore, the gifting of cryptocurrency, NFT, or other virtual digital assets is taxable in the hands of the receiver if received from a non-relative for a value exceeding ₹50,000,“ said Malhotra.