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Trade volumes for cryptocurrency exchanges have fallen due to price drop in Bitcoin, Ethereum, and major cryptocurrencies in the last month. In an interview with Money9, Sumit Gupta, CEO and co-founder, of CoinDCX talks about the future of cryptocurrencies in India and globally.

Q. Have people turned cautious after sharp corrections being seen in cryptocurrency prices?

Gupta: After an astounding rally in prices since the onset of the pandemic, we believe that major crypto assets are currently undergoing a consolidation phase which is healthy from a long-term perspective. Understandably, short-term investors have been cautious in the recent period owing to the increased volatility and some news emanating from China. However, long-term positions in BTC & ETH are relatively intact signaling that the current bearish phase would most probably end sooner rather than later.

Q. Have banks started doing business with exchanges after RBI’s recent clarification over Supreme Court judgment?

Gupta: After media reports stating certain Indian banks were asking their customers to not transact in crypto assets, the RBI swiftly acted in asking banks to refrain from such practices. Following suit, banks revoked these controversial memos and have restored banking services for customers transacting in or with crypto assets. We appreciate the RBI’s speedy response and continue to work with our banking partners towards providing a seamless experience to all our customers.

Q. What payment options does one have for trading on CoinDCX?

Gupta: At CoinDCX, we offer our customers a range of payment options to make crypto trading & investing a hassle-free process. Customers are free to choose options including deposits via bank transfers, UPI, or using payment apps like MobiKwik to transfer money on the go. Additionally, all methods are available 24×7, setting a benchmark amongst crypto exchanges in the country.

Q. Which are the most traded cryptocurrencies on CoinDCX? How much is the volume in absolute and percentage terms?

Gupta: Ever since March’20, we have seen nearly 3X growth in monthly trading volumes and currently average 500 crores in terms of the transaction value. The maximum transaction volumes on our trading platforms are contributed by popular crypto-assets like BTC & ETH. This is largely due to higher awareness amongst investors & the popularity enjoyed by these crypto assets. BTC & ETH combined contribute to nearly 60% of the total market-capitalization of all crypto assets combined and the same trend is reflected in trading volumes too. That said, we do see additional trading volumes from other crypto-assets like meme coins and their contribution varies depending on a host of factors influencing the crypto investor community.

Q.  When will Bitcoin touch an all-time high again?

Gupta: Crypto-assets like Bitcoin (BTC) & Ether (ETH) have usually corrected by ~50% from every previous all-time high (ATH) before restarting their upwards momentum towards a new peak price. Extending the same pattern to the current phase, the correction in prices of most crypto assets has now plateaued, and it will be crucial to see how they react in the medium-term now. The long-term outlook for BTC remains quite positive and investors with an appropriate investment horizon are sure to benefit from decent capital appreciation going by BTC’s historic behavior.

Q.  Does CoinDCX offer peer-to-peer trading? Are there any challenges?

Gupta: CoinDCX is by far India’s safest cryptocurrency exchange for seamless crypto-to-crypto (c2c) and fiat-to-crypto (f2c) trading. This is courtesy our strong AML & CFL processes that ensure maximum security of transactions for our customers. Thanks to ample liquidity on our exchange, we have been consistently delivering a quick, reliable and effortless experience for both short-term trading & long-term investing requirements. We will continue to operate as a centralized exchange due to the enhanced safety net it offers and currently do not offer P2P trading, which is decentralized, on our platforms.

Q. Can crypto replace gold in one’s portfolio?

Gupta: Bitcoin (BTC) has the largest market capitalization amongst all cryptocurrencies and will most probably continue to maintain this status in the long run. Additionally, since the supply of BTC is limited to a finite amount, it ensures that BTC will act as a hedge against inflation and is bound to keep appreciating in value over the years to come. With countries and institutions according BTC the status of legal tender, its global adoption as an asset class is gaining good momentum and is reckoned as ‘digital gold’ by many industry leaders. We believe that for the medium-term at least, investors can diversify their portfolio by investing in BTC as a hedge against inflation; like how Gold is invested in.