Late into the night, 25-year-old Sagar Neware scans price charts on his phone, tracking cryptocurrency movements. By day, he works at a local transport office, earning 25,000 rupees ($288) per month. But his real ambition lies elsewhere. “My father had to shut down his plastic packaging business a few years back,” he says. “My first dream is to restart it with the money I can earn from trading.”
Neware is among a growing number of young Indians in Tier 2 and Tier 3 cities turning to cryptocurrency trading as a means of financial security. As economic growth fails to translate into widespread job creation or wage increases, digital assets are emerging as an alternative investment. The cumulative trading volume of Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies on India’s four largest exchanges more than doubled in the October-December quarter, reaching $1.9 billion, according to data from aggregator CoinGecko.
A Shift from Traditional Investments
Crypto trading is increasingly attracting those who previously engaged in stocks and derivatives. Government regulations have made equity derivatives trading more difficult, driving traders toward digital assets. Many young investors see crypto as a hedge against economic uncertainty.
Ashish Nagose, a 28-year-old flower shop owner in Nagpur, has been attending cryptocurrency trading classes after work. “I want to run my family shop and hope that trading can provide a steady income when business slows down, like in the month after Diwali,” he says.
India’s crypto market is projected to grow from $2.5 billion in 2024 to over $15 billion by 2035, with a compound annual growth rate of 18.5%, according to Kush Wadhwa, a partner at consulting firm Grant Thornton Bharat. Seven out of the top ten cities driving India’s crypto activity in 2024 were non-metro locations, including Jaipur, Lucknow, and Pune, according to CoinSwitch, one of the country’s largest crypto platforms. “Growth is now being driven by non-metro cities. That’s true for the stock world, and it’s true for crypto,” says Balaji Srihari, Vice President at CoinSwitch, which has 20 million users.
Regulatory Uncertainty and Tax Burdens
Despite the rising popularity of cryptocurrency, India’s regulatory stance remains ambiguous. While the government has refrained from outright banning digital assets, it has imposed a 30% tax on crypto trading gains, one of the highest in the world, alongside a 1% tax deducted at source. A recent amendment to the finance bill subjects past unreported crypto gains to severe penalties.
Who oversees cryptocurrency in India remains unclear. While the market regulator has expressed openness to oversight, the government has yet to take a definitive stance. Meanwhile, the Reserve Bank of India continues to caution against digital asset risks. “Widespread usage of crypto assets and stablecoins has consequences for macroeconomic and financial stability,” the central bank stated in its December 2024 Financial Stability Report.
While metro cities like Mumbai and Delhi remain key hubs, small towns are seeing unprecedented interest in digital trading. Thoughts Magic Trading Academy, a small institute in Nagpur, has trained about 1,500 aspiring traders over the past two years. “You’re just one trade away from your dream life,” reads a poster in the classroom.
