• 27% of the first-time Crypto buyers on WazirX bought Shib tokens
• Women in the age group of 41-60 have traded more Virtual Digital Assets than men in the same age group
• Elon Musk’s Twitter takeover affected Dogecoin trading volume on the platform with a 3000% surge in trading once the takeover reached completion
• ChiliZ token (CHZ), the official token of the Socios.com fan voting portal, gained major traction ahead of the FIFA World Cup

Foreword

The year 2022 will go down in history as one of the decisive years for the Crypto ecosystem. The year started with hints of a bear market on the horizon, and in the span of a few weeks, we saw the industry turn upside down. 

After five years of consistent efforts to provide easy Crypto access to users, we witnessed market sentiments reaching an alarming low. This was in contrast to the positive sentiment we saw in the last few years, especially in 2021, when Crypto saw its best bull run ever.

A few reasons could be behind this:

• Increase in the number of Crypto users: Market perceptions were now dependent on 100 times the number of users as compared to the last bear run. The price fluctuations, as a result, were also drastic.

• Regulatory uncertainty: The country is still on the brink of an uncertain future when it comes to Crypto, with no regulations to protect users in case of massive losses in the portfolio or bad actors who run fraudulent businesses to trap vulnerable investors. 

• High Taxes: The last budget session saw the government not committing to grant Crypto legal tender status. At the same time, it imposed high taxes on sale transactions and gains, which indirectly acted as a deterrent for investors from getting into this space. Existing investors also started pulling out because the gains in Virtual Digital Assets would not be for them to keep, resulting in an unfavorable situation. Not just that, there was also a lot of ambiguity on how taxes will be calculated and also about the TDS to be deducted on trading platforms. This factor also significantly affected our trading volumes and other market players’ volumes. Starting April 2022, when the tax laws came into effect for Virtual Digital Assets, we saw a drastic decrease in the number of trades per day as compared to last year or even the previous month. 

• Collapse of promising projects: Many leading projects, and market aggregators, with a great record and potential couldn’t survive the volatile market conditions. In lieu of the increasing scrutiny that the market was subjected to after user portfolios took massive hits, many projects crumbled due to a weak foundation and unethical practices.

User behavior highlights

• WazirX saw a user volume of $10 billion till 30th November 2022. 
• 2,122,925 new users signed up on the exchange this year.
• The top tokens traded on WazirX were BTC, USDT, SHIB, WRX, ETH, TRX, DOGE, MATIC. 
• Women traded 20% of the top tokens traded on the platform, on average. 
• Women in the age group of 41-60 and above have transacted more in VDA than men in the same age group. Women in the age group of 26-40 contributed to 46% of the total trading volume by all women users on the platform.
• Men between the ages of 18-40 transacted more in VDA than men in the other age groups.
• Women traded more blue chip tokens (tokens that are perceived of high value in the long run with high liquidity). 
• Men, on the other hand, invested in meme tokens, gaming tokens, etc., besides blue chip tokens. 
• ETH was a popular choice for men and women in the age group of 26-40, with women in this age group contributing to 47.48% of all trades made by women users. Men in the same age group contributed to 56.70% of the trading volume made by male users. 
• BTC remained popular among men between the ages of 26-40 with 49% trading volume and women between 41-60 with 40% trading volume. 
• Women in the states of West Bengal (42%), Haryana (35%), Uttar Pradesh(25%), and Karnataka (21%) were involved in the most Crypto trades.
  

Shiba Inu’s popularity run continues 

Even in the bear market, Shiba Inu tokens reigned supreme with unfazed popularity. 27% of the first-time Crypto buyers on the platform bought Shib tokens, followed by TRX (11%) and BTC (8%). Men between the ages of 26-40 traded 50% of all Shib tokens traded on the platform. 

FIFA World Cup mania

ChiliZ token (CHZ), the official token of the Socios.com fan voting portal, has been a popular token as a precursor to the FIFA world cup. The token offers voting rights to fans for activities related to their favorite teams and players. Among female traders, users in the age group of 26-40 had the highest share (63%) of CHZ tokens, whereas users between 41-60 had 28% of them. Among male traders, users between 26-40 had 58.29% of CHZ tokens, and those between 18-25 held 12.9% of the tokens.

The Elon Effect

Elon Musk’s Twitter takeover news reflected in the Crypto purchase behavior of users. News of Musk offering to buy Twitter started floating in mid-April. The trading volume of Doge on WazirX went up by 1300% compared to the previous week at that time. The volume dipped when the deal apparently fell through. However, towards the end of October, when the Twitter acquisition by Elon was near completion, the trading volumes went up significantly by 3000% despite low trading volumes in the previous few weeks. 

Traditional gifts get a new twist with Crypto

Raksha Bandhan and Diwali, two important festivals in India, which are observed by exchanging gifts between loved ones. This year, we introduced the Crypto gift card feature on our platform, where users can send WRX tokens to each other, starting at INR 50 only! 

It was a success among our users since Crypto as an asset has value unlike any other perishable gifts exchanged usually. We saw gift cards worth a total of INR 1.1 Million (INR 11 lakhs) purchased on our platform for the festivals, with 50% of the gift cards bought during Diwali. For Diwali, we also introduced ‘Shagun’ for users who purchased gift cards for their loved ones. Gestures like these help in driving awareness and adoption of Crypto. The barrier to entering Crypto is low, 

and it is inclusive. In the coming years, we will continue to see more such trends where Crypto becomes an integral part of India.

Predictions for 2023

• Increase in awareness: While several surveys involving retail investors claim how they continue to be bullish about Crypto, lack of awareness remains a key barrier to its mainstream adoption. With limited knowledge of the potential of Crypto, users will continue to perceive it as only a store of value. It is important to raise awareness about the pros and cons of Crypto, its volatility as well as its several use cases. Here, organizations focused on educating users on blockchain will benefit in the long run.

• Public-Private partnerships: It is important for the government to give an opportunity to local Web3 players to participate in initiatives where VDAs will play a key role. Web3 companies are poised to tackle the onboarding of users to Crypto as they have experience in the same. State governments like Telangana, Madhya Pradesh, etc, have been actively involved in dialogues with private players to further the cause of blockchain in the public sector and make it mainstream. Next year could see a few more such collaborations. 

• Utility of Crypto: We will witness the acceptance of retail Crypto payments in businesses and the need for a sophisticated interface where these transactions can take place swiftly and hassle-free. Exchanges will be the top choices for Crypto exchange among users. For this, they must remain agile with the changing technology trends. 

• Security of funds: With some major mishaps in the Crypto ecosystem in the form of the Terra crash and FTX fiasco, users are wary of their funds. They will have second thoughts while investing in digital currencies. Platforms that have the potential to provide security and trust with complete transparency will witness more users preferring them over others.

• CBDC: The RBI’s CBDC trial has ignited the hopes among several Crypto enthusiasts. If rolled out on a blockchain, it will be a glimpse of how digital tokens operate for the public and, in turn, might interest users to get an experiential taste of private digital tokens.

• Regulations: The Hon’ble FM of India has already indicated her intention to regulate Crypto with a collaborative framework with other G20 countries. With India’s G20 presidency, the world is waiting for regulatory clarity that will impact one of the largest user bases of Crypto. There are hopes of consumer protection, removal of high taxes, encouraging local platforms to conduct operations without hindrance, and spreading Crypto education to every corner of the country. 

Conclusion 

India still has a long way to go in terms of Crypto awareness and adoption. This can only begin by spreading right information, positive use cases, and potential benefits of virtual digital assets. While we have seen many users being affected by the market crash, portfolio value drop, etc., several long term HODLers have continued to trade and invest in Crypto.

The benefits of Crypto will reflect with time and extend to every last citizen in the world. In the coming years, with better regulatory clarity, secure infrastructure for transferring assets, introduction of CBDCs, institutional adoption of Crypto, and more brands introducing services pertaining to Virtual Digital Assets, it’s only a matter of time before Crypto becomes an integral part of our daily lives.