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    WazirX, Coinswitch Kuber see drop in trades as prices continue to fall

    Synopsis

    The crypto bull run and resultant spike in trading activity meant many exchanges were frequently down for maintenance, leaving users unable to make trades.

    CRYPTOETtech
    Illustration: Rahul Awasthi
    MUMBAI: The crypto frenzy that engulfed exchanges in the first half of 2021, on the back of a historic bull run in Bitcoin and other tokens, is finally simmering down.

    WazirX, India’s largest exchange by volume, reported a 60% decline in trading activity in June compared to May. Other crypto platforms such as CoinDCX and Coinswitch Kuber also experienced a similar drop. User sign-ups have also declined, although exchanges did not reveal the numbers. The dip indicates that frequent traders have exited while long-term investors are holding their positions.

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    Crypto platforms are using the lull to build capacity and improve the stability of their systems, executives told us. The crypto bull run and resultant spike in trading activity meant many exchanges were frequently down for maintenance, leaving users unable to make trades. Exchanges dedicated manpower and resources to scale capacity in real-time, putting almost everything else on the backburner.

    “We did not have the bandwidth to build anything new in the past five to six months because of crazy volumes,” said Nischal Shetty, co-founder and CEO of WazirX. “The idea is to now work on both improvement and new features.” He added that the company has hired over 100 people across tech, marketing and support.

    Revenue from trades is the main source of income for exchanges. Sharan Nair, chief business officer of CoinSwitch Kuber, said bear markets could be good for exchanges despite the possibility of a decline in revenue.

    “Bear markets bring a silver lining for good exchanges,” Nair said. “It gives you that ability to scale, build a robust system and launch new products.”

    Nair said that the platform is improving its security, and focusing on launching educational initiatives and products to help crypto holders earn more from their existing assets.

    ZebPay recently launched a lending product that allows crypto investors to earn passive income. “We have always recommended investing in crypto assets for the long run. Right now, the assets and technology are still in their early stages. While we take these assets as a long-term wealth-building tool, we want to make sure all our investors are getting the maximum benefit from their investments,” said Avinash Shekhar, co-CEO, ZebPay.

    Exchanges in India witnessed unprecedented retail investor interest and an increase in sign-ups across age groups in the first half of the year. Trading volumes on WazirX crossed $6 billion in May. And since the Supreme Court overturned the RBI’s ban on banks dealing with crypto firms last year, sign-ups have shot up by 1,800% on CoinSwitch Kuber, almost 700% on CoinDCX and 5,000% on WazirX. Despite the dip in June, WazirX’s trading volume stood at $2.5 billion, compared to $101.9 million in June 2020.
    The Economic Times

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