• India has introduced two new taxes on crypto transactions – 30% capital gains tax and 1% transaction tax as TDS – effective April 1, 2022.
• A new study has quantified the value of cumulative trading that shifted from Indian to foreign crypto exchanges after the new taxes kicked in.
• The study revealed that nearly $3.8 billion of cumulative volume has been moved overseas since the new taxes came into effect.
The Indian cryptocurrency sector has been in a state of flux since April 1, 2022, when two new taxes were imposed on crypto transactions – 30% capital gains tax and 1% transaction tax as TDS. This has caused a major disruption in the sector, with traders scrambling to find solutions to save their investments.
The new taxes have had a drastic effect on local crypto exchanges, with most estimates quoting losses to be over 90% compared to the previous year. This has caused a massive outflow of capital from Indian crypto exchanges to foreign exchanges, as Indian traders look to find more favorable conditions for their investments.
Now, a new study by CryptoPotato has quantified the value of this outflow of capital from Indian exchanges to foreign ones. The study reveals that since the new taxes came into effect, a cumulative volume of nearly $3.8 billion has been moved overseas. This is a staggering amount and is indicative of the impact of the Indian government’s policy on the sector.
The study also revealed that the foreign exchanges that have benefitted most from the Indian crypto exodus are Binance, Huobi, and OKEx. These three exchanges have seen their cumulative trading volumes increase significantly since April 1, 2022. Binance, for instance, has seen its cumulative trading volume increase by $1.1 billion, while Huobi has seen its volume increase by $1.2 billion and OKEx has seen its volume increase by $1.5 billion.
What’s more, the outflow of capital from Indian exchanges has not been limited to just trading volume. Indian traders have also been taking advantage of the more favorable conditions available in foreign exchanges to do other activities like staking, margin trading, and derivatives trading. The study reveals that the cumulative value of these activities has also increased significantly since April 1, 2022.
The Indian government’s policy of imposing taxes on crypto transactions has had a devastating effect on the sector. The study reveals that since the taxes came into effect, a whopping $3.8 billion of cumulative volume has been shifted overseas. This is a massive amount and is indicative of the impact of the Indian government’s policy on the sector.
The study also reveals that the foreign exchanges that have benefitted most from the Indian crypto exodus are Binance, Huobi, and OKEx. These three exchanges have seen their cumulative trading volumes increase significantly since April 1, 2022. Binance, for instance, has seen its cumulative trading volume increase by $1.1 billion, while Huobi has seen its volume increase by $1.2 billion and OKEx has seen its volume increase by $1.5 billion.
In addition to trading volume, the outflow of capital from Indian exchanges has also been felt in other activities like staking, margin trading, and derivatives trading. The study reveals that the cumulative value of these activities has also increased significantly since April 1, 2022.
The Indian government’s policy of imposing taxes on crypto transactions has had a devastating effect on the sector, and the study reveals that the impact of this policy is far-reaching. In addition to the large outflow of capital from Indian exchanges, the study also reveals that other activities related to the crypto sector have been affected as well. It is clear that the Indian government’s policy has had a huge impact on the sector and that it will take some time for the sector to recover fully.