As day traders flee, India’s crypto exchanges are planning for the long term

India’s cryptocurrency exchanges are launching a series of “longer-term investments” to combat this year’s slump in crypto values and a drop in activity as harsh taxes drive away day traders.

Staking is used to earn income on cryptocurrency deposits, while dollar-cost-averaging algorithms are used to set aside funds to acquire crypto on specific dates rather than trying to time the market.

CoinDCX, India’s first crypto unicorn, launched a mobile wallet called Okto last week, giving users access to a variety of decentralized finance (DeFi) apps.

Bitay and other Indian exchanges saw their business models shattered when the government imposed a flat 30% tax on all crypto profits beginning April 1. from July 1, a 1% tax deducted at source (TDS) will be levied on all crypto transactions above 10,000 Indian rupees (us$126).

TDS has reduced so-called scalp trading, which involves buying and selling within seconds or minutes to profit from modest price swings, because paying 1% on each trade erodes capital, according to Malhotra in an emailed response to inquiries.

According to a report by crypto researcher Crebaco, trading volumes on Indian exchanges decreased by up to 70% after the 30% tax went into effect on April 1.

Taxes and unfriendly regulatory bodies have caused some enterprises to relocate to Dubai and Singapore, while others have focused on new services.

Subhash Chandra Garg, India’s former finance secretary and author of “The Ten Trillion Dream,” a book about the country’s economy, is skeptical that the approach of creating new crypto goods will be successful.

Longer-term investment plans for equities and other financial goods have been effective, but if the underlying instrument does not inspire trust, related products are unlikely to improve that, he says.

That doesn’t stop Indian exchanges from attempting.