Crypto Market Sees Optimistic Bounce Amid Trump's Pro-Crypto Stance

New Delhi: The Indian cryptocurrency sector is watching with bated breath as Bitcoin prices soared to $82,000, marking a new all-time high and injecting hope into the battered industry. Over the past three years, retail trading volumes have declined by over 90%, but domestic exchanges are cautiously optimistic about the latest surge.

The recent price jump has seen significant growth in user engagement, with platforms like CoinSwitch reporting a 500-700% sequential increase in active users. Ashish Singhal, chief executive of CoinSwitch, attributed this growth to Donald Trump's victory in the US presidential elections, which has sent the cryptocurrency market into a frenzy.

"We've seen a double-digit percentage of inactive users logging in and becoming active traders over the past week," Sathvik Vishwanath, chief of Unocoin, told Mint. "More investors are adding to their cryptocurrency holdings due to the overall global growth of cryptocurrency tokens as an investment class."

The pro-crypto stance of Trump, contrasted with the Biden government's approach, has also sent shockwaves through the industry. Gary Gensler, chairperson of the US Securities and Exchange Commission (SEC), had previously touted that cryptocurrencies involved "frauds, scams, and abuses," but Trump's recent investment in a cryptocurrency business has raised hopes for a more favorable policy approach.

Vikram Subburaj, chief of Giottus, said that if Trump's stance on cryptocurrencies becomes more positive, it could lead to a boost in Bitcoin's price above $100,000. However, each party is cautious about this new trend and its long-term viability.

"We remain unsure about the sustainability of this rally. If Trump's policy work on cryptocurrencies takes a backseat, investors may not take a bullish stance on Bitcoin for a very long term," Subburaj cautioned.

India has been slow to adopt cryptocurrency regulations, with several incidents like the WazirX hacking incident further compromising trust among consumers. Sumit Gupta, chief executive of CoinDCX, attributed this decline in investor confidence to high tax rates and the lack of regulatory clarity.

"We haven't heard any intent from the Centre to introduce a more favorable approach towards the cryptocurrency industry, but we're hoping that a friendlier US policy approach may make the Indian market more viable for investors," Gupta said.

Investors are watching closely as India considers its stance on cryptocurrencies. While growth is certainly on the cards, the long-term outlook depends on several factors, including regulatory clarity and market sentiment.