After Trading Volumes Crash, Cryptocurrency Exchanges Bet on Long-Term Products

The exchanges in cryptocurrency are pinning hopes on systematic investment plans, loan plans, and futures trading that attract retail investors along with the horizons of long-term. 

After spending on promoting cryptocurrencies and buying them in the last year, bruised cryptocurrency exchanges in India that are now pushing offers such as SIPs or systematic investment plans, loans, and future trading, which attracts more retail investors with long-term products. 

The shifting in focus from short-term trading and intraday comes amid new taxation rules and plunging valuations of tokens related to cryptocurrency, which led to trading volumes plummeting on exchanges. An estimated nearly 85-90 percent trading volume on some common crypto exchanges such as Zebpay, CoinDCX, WazirX, and Bitbns was wiped out from January to July. 

Cryptocurrency startups and exchanges see the opportunity to promote crypto products such as SIPs, derivatives, loans, and fixed deposits, that suit long-term investors. WeTrade and Bitbns are two exchanges that introduce new offerings to help investors around TDS while continuously investing in cryptocurrencies. 

We saw recently trading volume that crashes, from here on cryptocurrency exchanges tread on different paths. Of course, this is tough for the industry but I hope it will be bottomed out,” founder of Bitbns, Gaurav Dahake told Moneycontrol.   

WeTrade is a Bengaluru-based startup that was recently launched and went a step ahead when TDS is coming into effect. It is offering one percent cashback on investment with zero trading fees, and an additional 1 percent cashback on sale. 

The founder of WeTrade Prashant Kumar said that they have waived all the transaction charges and they paid for the TDS that is incurred to ensure the seamless journey of the customer. Our exclusive rewards give NFT on each sign-up and an additional one percent cashback on the purchase of every coin. 

Unocoin’s founder Vishwanath explained that the lending of crypto would be similar to the gold loan, where money can be lent based on the ratio of loan-to-value. It is a metric to calculate the amount advanced against the mortgaged asset value, which is a highly volatile token in crypto. 

Experts said that with these options in such conditions, the time may be ripe to get into the crypto market for the long haul. 

Yet, these products appear to ignore the absence of a regulatory framework in the crypto sector. In traditional markets and banking sectors, products like mutual funds, lending, and SIPs are highly regulated that are controlled by different entities such as the SEBI (Securities and Exchange Board of India) and RBI (Reserve Bank of India) 

A surge in the alternative offerings of crypto could draw the scrutiny of RBI, which has a strong anti-crypto stance. Finance minister of India, Nirmala Sitharaman said that the RBI recommended that cryptocurrencies be completely banned by the government. 

Vishwanath, speaking on the legality of such offerings, said that right now the industry is unregulated as RBI or SEBI equivalent to the governing bodies that are concerned. We do not have regulations that do not even fall under the SEBI. These policies are offered because of no regulations. And, there are rules in the place that will either get amended or may be continued.