Into the Cryptoverse: Exploring India's Rising Crypto Adoption, Investment Preferences, and Innovation Trends in 2023

At KuCoin, we are committed to fostering a deeper understanding of the global crypto community. This dedication is at the core of our Into the Cryptoverse report series, which seeks to explore the dynamic crypto markets worldwide. In our 19th edition, we shine a spotlight on India, a country rapidly embracing crypto technology and innovation.

The Into the Cryptoverse: India 2023 report dives into the behavior, motivations, and preferences of crypto users in India. Our findings not only benefit the crypto community but also provide valuable insights for policymakers, regulators, and stakeholders looking to better understand this burgeoning market.

Key Highlights: What Is in the Report?

Interested Crypto Use Cases: 48% of Indian crypto users prefer using crypto for payment and transactions, embracing practical utilities beyond investment.
Crypto Investment Preference: Expecting bull run by mid-2024, Indian crypto investors show overwhelming 75% interest in Bitcoin investments and enthusiasm for Layer 2 solutions.
Trends in Crypto Innovation: 75% of Indian crypto users show enthusiasm for AI and blockchain integration as the most anticipated innovation in the crypto landscape.
Industries for Crypto Innovations: Crypto’s significant potential in Finance (72%), Gaming (61%), and Education (52%) industries in India.
India’s Market Strengths: 53% recognize India’s market strength in access to capital, followed by a global network and topnotch workforce
India’s Market Challenges: 54% view lack of proper crypto education as a key challenge of the Indian market, following regulatory complexity.

Methodology

The survey, conducted between September 28 and October 16, 2023, polled 1,295 crypto investors across India. Respondents, ranging in age from 18 to over 40, shared their experiences, preferences, and challenges related to the crypto market.

Overview of the Indian Crypto Market

India has emerged as a key player in the global crypto market, with the country ranking second in terms of raw transaction volume globally, according to Chainalysis. From July 2022 to June 2023, India saw $269 billion in crypto transactions, highlighting the growing grassroots adoption of digital assets. The country's position at the top of the Global Crypto Adoption Index further demonstrates India's leadership in the space.

Chainalysis 2024 Global Crypto Adoption Index | Source: Chainalysis

Decentralized finance (DeFi), non-fungible tokens (NFTs), and blockchain technology have fueled much of this growth. With notable projects like Polygon spearheading innovation, India continues to be a hub for cutting-edge developments in the crypto ecosystem.

A Deep Dive into the Indian Crypto Investor’s Mindset

Crypto Use Cases: Investment, Transactions, NFTs, and More

In India, 64% of crypto users view cryptocurrencies primarily as an investment vehicle. This reflects a strong belief in crypto’s potential for wealth accumulation and speculative trading. Beyond investment, 48% of Indian users prefer using crypto for daily payments and transactions, indicating the growing acceptance of digital currencies in real-world financial activities.

Other popular use cases include NFTs and digital assets, which attract 36% of respondents. Crypto gifting and gift cards are also becoming notable, with 32% of users showing interest in these options. Additionally, DeFi activities, such as lending and borrowing, are gaining traction, appealing to 27% of Indian crypto users.

Other use cases with moderate interest include receiving/paying salaries in crypto, participating in governance and voting processes, and exploring tokenized real-world assets (RWAs). The survey underscores the multifaceted appeal of crypto in India, ranging from traditional investment avenues to innovative applications in the digital economy.

Crypto Investment Preferences: Bitcoin, Ethereum Hold Top Spots

Bitcoin remains the dominant choice for Indian investors, with 75% expressing a preference for the leading cryptocurrency. This highlights Bitcoin’s enduring appeal as a store of value. Following closely, 63% of respondents favor Ethereum, underscoring its critical role as the premier platform for decentralized applications.

The survey also reveals strong interest in Layer 2 solutions, such as Polygon, with 44% of Indian investors eager to participate in these scalable alternatives. This enthusiasm reflects a growing awareness of the need for solutions that address blockchain scalability challenges.

Considerable interest in infrastructure, public chain and Layer 1 blockchains is uncovered, with 33% and 32% of respondents expressing enthusiasm, underscoring the importance placed on the foundational aspects of blockchain development. Finally, emerging sectors such as Metaverse, AI, Meme coins and GameFi remain popular among a considerable portion of crypto investors, showcasing a diverse range of investment preferences in the crypto landscape.

When Is the Next Crypto Bull Run?

Indian crypto investors are optimistic about the market’s future, with most expecting the next bull run to begin by mid-2024. A significant 31% of respondents are even more confident, predicting that the bull run could start as early as the beginning of 2024. This anticipation of a market resurgence reflects the overall positive sentiment toward crypto’s long-term growth potential in India.

Innovations in Crypto: 75% Indians Excited About AI and Blockchain

Indian crypto users are particularly excited about innovations in the space, with 75% expressing enthusiasm for the integration of artificial intelligence (AI) with blockchain technology. This innovation is seen as the most anticipated development, promising to enhance the functionality of decentralized systems.

In addition to AI, 50% of respondents are highly interested in blockchain-based identity solutions, which could significantly improve privacy and security. Blockchain-powered supply chain tracking is also gaining attention, with 40% of Indian crypto users excited about its potential to bring transparency and efficiency to the movement of goods.

DeFi holds a notable position, with 37% expressing excitement about the innovations in this sector. The interest in DeFi suggests a growing appetite for decentralized financial services and applications, challenging traditional financial systems. Other areas of excitement include Layer 2 solutions, GameFi, Metaverse innovations, and Non-Fungible Tokens (NFTs), showcasing a multifaceted interest in emerging trends within the crypto space. The survey reflects the dynamism and curiosity of the Indian crypto community, as they eagerly anticipate and embrace a diverse range of innovations shaping the future of blockchain technology.

Top Industries for Crypto Innovations: Gaming, Education, and More

The survey underscores crypto’s transformative potential across various sectors, particularly in finance, gaming, and education.

Crypto's Impact on the Finance Industry

The survey highlights that a significant 72% of Indian respondents view crypto as a disruptive force in the financial sector. This sentiment underscores the potential of blockchain and cryptocurrency to transform traditional financial systems, offering more decentralized, secure, and efficient financial services. As more individuals and businesses adopt digital assets, the role of crypto in reshaping the financial landscape is expected to grow, further solidifying its position as a key player in the global economy.

Crypto's Role in the Gaming Industry

A notable 61% of survey participants recognize the transformative potential of crypto in the gaming industry. This aligns with the rise of blockchain-based gaming ecosystems, particularly the play-to-earn model, where players can earn rewards in the form of digital assets or tokens. The integration of crypto into gaming not only provides new revenue streams for players but also offers game developers innovative ways to enhance user engagement through tokenized assets and decentralized gaming economies.

Crypto's Potential in the Education Industry

In the education sector, 52% of respondents believe that crypto has the potential to revolutionize the way educational institutions manage credential verification and secure record-keeping. Blockchain technology can provide a transparent and immutable system for storing academic records, ensuring their authenticity and security. This can streamline processes for institutions and learners alike, making it easier to verify qualifications and transfer records across borders, enhancing the overall educational experience.

Governance and legal structures, real estate, art and culture, social impact, tourism, and healthcare round out the list of industries where respondents see crypto playing a pivotal role. This broad recognition suggests a comprehensive understanding of the versatile applications of crypto beyond finance, permeating diverse sectors and potentially shaping the future of multiple industries in India.

Strengths and Challenges of the Indian Crypto Market

The Indian crypto market holds immense potential, supported by several key strengths, but it also faces notable challenges that must be addressed for sustainable growth. This section explores both the advantages driving the market forward and the obstacles that could hinder its development, as outlined by the survey participants.

Strengths of the Indian Crypto Market: Globalization, Talent Pool, and Infrastructure

One of the key strengths of the Indian crypto market, according to 53% of respondents, is the accessibility of funding and capital. This highlights the financial support available to foster innovation and growth in the crypto ecosystem, enabling new projects and startups to thrive.

In addition to access to capital, 41% of respondents recognize India’s global networks as a significant strength, reflecting the country’s ability to connect with international markets and collaborators. A top-tier workforce is another asset, with 40% acknowledging the talent pool driving development in the crypto space. Furthermore, 39% of respondents view India's strong financial infrastructure as a critical advantage, underscoring the country's ability to integrate traditional financial systems with emerging blockchain technologies. Cultural openness, although ranking lower at 22%, is still recognized as a potential advantage in developing India's crypto industry, suggesting that a culturally diverse and open mindset can contribute to fostering innovation and acceptance within this rapidly evolving market.

Challenges Facing the Indian Crypto Market: Tax Woes Dominate

Despite its strengths, the Indian crypto market faces significant challenges. A substantial 70% of respondents identify complex tax regulations as the most pressing issue, indicating a need for clearer guidelines and a more streamlined regulatory framework.

Another key challenge is the lack of crypto education, with 54% of respondents highlighting this as a barrier to wider adoption and understanding of digital assets. Security concerns, including scams and fraudulent activities, are also prominent, with 40% of respondents emphasizing the need for enhanced security measures to protect users and build trust within the ecosystem. These findings collectively emphasize the multifaceted nature of the obstacles facing the Indian crypto industry, signaling the need for concerted efforts in public education, regulatory clarity, and security enhancement to foster a more conducive environment for sustainable crypto development in the country.

Conclusion

The Into the Cryptoverse: India 2023 report paints a vivid picture of a rapidly evolving crypto market, full of potential but facing significant challenges. As India continues to develop its crypto landscape, it is clear that both opportunities and obstacles lie ahead. KuCoin remains committed to deepening our understanding of this dynamic market and fostering a more inclusive and responsible global crypto ecosystem.