India’s cryptocurrency market continues to expand despite taxes and regulatory uncertainty. Younger investors, participation from smaller cities and interest in digital assets as a diversification tool are supporting adoption.
India’s Crypto Investor Base Keeps Expanding
A June 2026 OECD report found that India and Korea received the largest absolute crypto-asset inflows during the 12 months to June 2025. India has 50 crypto exchanges registered with FIU-India, while CoinSwitch Co-Founder Ashish Singhal estimates the country has 70 million to 90 million crypto investors.
According to finance ministry data cited by Mudrex’s Prateek Gupta, India recorded Rs 1,09,580 crore in Virtual Digital Asset transactions between FY23 and FY25, a cumulative increase of 131%.
Younger Investors Drive Adoption
WazirX’s H1 2026 Crypto Trends Report found that more than 82% of users came from non-metro cities, with a typical investor aged 34.
CoinSwitch’s August 2026 report found nearly three-fourths of Indian crypto investors were under 35. Among new investors, 54.4% were aged 18-25, while Uttar Pradesh and Maharashtra represented 12.9% and 12.4% of the market respectively.
Singhal says, “We are seeing investors becoming more informed and diversified in how they approach the asset class. Beyond returns, factors such as growing institutional participation, improving compliance standards and greater regulatory clarity are helping build confidence.”
Taxes Remain a Major Barrier
India imposes a 30% tax on income from VDA transfers and 1% TDS on transfers, while losses cannot be offset against other income. WazirX Founder Nischal Shetty says, “About 90-95% volume evaporated from Indian markets after the announcement of the taxation in the Union Budget 2022.”
According to KoinX data cited by Gupta, nearly 73% of Indian crypto trading volume migrated to offshore platforms in FY25.
Regulation Remains Unfinished
India has strengthened KYC, anti-money-laundering and reporting requirements without introducing a comprehensive crypto law. The Parliamentary Standing Committee on Finance has identified a regulatory grey area and recommended examining a statutory framework.
The contradiction remains clear: adoption is growing despite taxation and uncertainty. A defined regulatory framework could determine whether India’s crypto user base develops through domestic platforms or continues shifting activity offshore.
Also Read: India’s Crypto Base Broadens as Gen Z, Smaller Cities Gain Ground
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
