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Spot trading volumes have reduced further in India following the FTX collapse. Top Indian exchanges reported a decline in crypto trading after the Bahamas-based cryptocurrency exchange, FTX, filed for bankruptcy on Friday, in the United States. The decline was marginal, however, as trading volumes were subdued in India, which was already experiencing a bear market.
Exchanges Zebpay, Bitbns, and WazirX saw a respective decline of 40 per cent, 32 per cent, and 14 per cent in spot trading volumes the very next day after the FTX collapse was announced. Spot volume climbed in subsequent days; however, it has not reached pre-Friday levels .
Monthly volumes
Monthly spot trading volumes remain similar to the ones reported in September, although these trading levels are only a fraction of the numbers reported by the exchanges in January. As of November 14, the monthly numbers are 3.9 per cent, 28 per cent, 47 per cent, and 16 per cent of the January numbers reported, respectively, for Zebpay, Bitbns, CoinDCX, and WazirX. On a year-over-year basis, the drop is even more precipitous.
The FTX collapse subdued any gains recently made by the crypto market globally. After the FTX collapse, the overall crypto market fell by 20 per cent in a week to $824 billion from $1.02 trillion.
| Zebpay | Bitbns | WazirX | CoinDCX | |
|---|---|---|---|---|
| Friday (Pre Collapse) | $1,510,854 | $7,163,165 | $1,748,030 | $1,502,575 |
| Saturday (Post Collapse) | $919,638 | $4,814,194 | $1,501,583 | $1,688,289 |
| % | (40%) | (32%) | (14%) | 12% |
From the sharp fall in the price of Bitcoin to the crash of Luna, the year 2022 has been a difficult one for cryptocurrency investors across the world.
Muted effect
A likely reason behind the muted effect of the Friday collapse on trade volumes in Indian exchanges is the limited exposure to FTX and its related entities. However, the ripple effects of global market conditions on the Indian crypto market are likely to continue. With Indian trade volumes showing no signs of improvement, more transparency from Indian exchanges on their reserves and liabilities is paramount, according to experts.
Bogged by persistently low volumes, Indian exchanges have also been seeking regulatory oversight from the Indian government, but no relief is apparent on the horizon.
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