The cryptocurrency exchange WazirX has seen a 76% drop in their average trading volumes since the start of 2022 through November 30 of this year.
Uncertainty in crypto land
It is not very surprising that trading volumes have decreased slightly. The entire crypto industry has experienced a significant downturn during the year, with the collapse of several major companies and projects such as FTX, Terraform Labs, and the Celsius Network, among others. This in turn has had a major effect on digital asset prices, which has also resulted in somewhat lower trading volumes at the moment.
The crypto industry in several countries worldwide, including India where WazirX is active, is also confronted with uncertainty about possible regulations. The country would still be on the verge of an uncertain future, according to WazirX, at least in the area of crypto. There is no form of regulation yet to protect the users in the jurisdiction in case of losses or bad actors in the industry. This makes it relatively easy to run fraudulent companies to trap vulnerable investors, for example.
Working on crypto regulation
Some other countries are working hard on some form of crypto regulation. For example, a tax has already been introduced several times on the profits of digital assets, ranging from 20 to 30%, which could regulate the market. This form of taxation has already been implemented in some countries.
WazirX said that after imposing taxes on virtual digital assets, investors pulled out because their profits “would not be for them to keep”, resulting in an unfavorable situation.
According to WazirX, this factor also affected trading volumes on the platform. “From April 2022, when the tax came into effect, we saw a drastic drop in the number of transactions per day compared to last year or even the month before,” the report said.
It is currently unknown if and when the trading volume on WazirX will increase again. This depends on various factors.