Cryptocurrency in 2022: What it was, what it is, and what to expect in 2023 – Business Standard

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Year End Specials | cryptocurrency | cryptocurrencies
Raghav Aggarwal  |  New Delhi

The year 2022 was turbulent for . Tightening monetary policy and geopolitical pressures led to a major sell-off in the industry. Following hawkish commentary from the Reserve Bank of India (RBI), the Indian government imposed a flat 30 per cent tax and an additional 1 per cent tax deducted at source (TDS) on the transfer of crypto tokens in this year's Budget.
In addition to this, the RBI launched its own digital currency, Central Bank Digital Currency (CBDC) in 2022.
Just as the market was beginning to stabilise in the second half of FY23, the collapse of FTX exacerbated the situation. Once the third-biggest crypto exchange, it took just a couple of days for FTX to wipe out billions of dollars. The total market cap of the industry has fallen close to $200 billion since the fraud surfaced in early November. Since the fallout, several exchanges have started publishing their proof-of-reserves to allay the investors' fears.
Several other firms like Celsius, Three Arrows Capital, and more recently, Core Scientific filed for bankruptcy in 2022.
Overall, the year saw bear hug in the crypto industry. Bitcoin, the largest by market cap, was trading at $47,098 at the start of 2022. By December 25, it had fallen to $16,880.
Business Standard talked to various crypto firms in India about how 2023 will be for the industry.
WazirX: Nischal Shetty, CEO
"After the market crash of 2022, the whole community has gone into a recovery mode — building resilient, viable products, introducing measures to stay afloat, building secure infrastructure, etc. As we continue to see long-term Crypto supporters HODL their assets, it is also a common expectation that the market will be back on its feet soon. However, we will begin to see silver linings sometime towards the end of next year.
It will also be interesting to see how nations collaborate with each other in classifying digital assets, protecting user interest, and fostering a robust environment for the growth of .
On the tax front, we have requested the government to reduce the taxes on Crypto gains and tax deducted at source."
CoinDCX: Minal Thukral, executive vice president of Growth and Strategy
"The crypto market is expected to consolidate for the next few quarters and the derivative play will push the volume growth as seen in the recent past. The ecosystem will continue to build for the long term. However, in 2023 liquidity crunch may cause disruptions in the institutional market which could end up locking assets for a longer term…Investors are likely to stress on the high-quality assets which will deliver more value.
Through our representation for the upcoming Union Budget 2023-24, we have suggested that the rate of be brought down to 0.01 per cent."
CoinSwitch: Ashish Singhal, co-founder and CEO
"2022 has shown us that regulating crypto is not simply a matter of setting the tax rate. India needs to take a broader view of what and how the rules set here impact crypto customers, and how they adapt to these changes."
CoinSwitch: Parth Chaturvedi, crypto ecosystem lead
"A global coordinated regulatory framework is the need of the hour, for safeguarding the users and players of the industry. India's G20 Presidency is being seen as a catalyst for the same and could be a great initiative to set the future course of Web3's growth."
Mudrex: Edul Patel, CEO and co-founder
"While this prolonged period of the market downturn, sometimes referred to as a 'crypto winter' may have tested the resolve of some investors, it has also presented opportunities for those who are committed to the technology to continue developing and innovating…Despite the challenges faced this year, the industry has made significant strides in improving transparency and security. As we move into the new year, it is a great time for investors to review and strategize their portfolios to take advantage of potential opportunities."
KoinX: Punit Agarwal, founder
"We are sure in the coming year, crypto markets will bounce back from the current low levels, citing ease in inflation and less hawkish policy stance by central banks across the world…With the upcoming Union Budget, we are expecting better clarifications on the classification and taxation of these VDAs. We are expecting better crypto education as well."
MuffinPay: Dileep Seinberg, founder & CEO
"The industry is evolving from unorganised and unregulated to audited and regulated. As a result, projects with utility and value derived from real-world use cases will be driving the industry forward… 2023 is probably going to be a year of growth and consolidation. The later part of the upcoming calendar will see the emergence of new projects and potential signs of improving sentiment."
BuyUCoin: Shivam Thakral, CEO
"In 2023, we can expect favourable macroeconomic conditions as central banks have hinted towards the relaxation of monetary policies and interest rates. Inflation will be a key factor in deciding the fate of financial markets across the globe. The Crypto market will overcome the collapse of crypto giants like FTX and move towards a more mature phase with wiser investors and healthy regulations."
Liminal: Mahin Gupta, founder
"A key learning from 2022 is that the onus lies on industry players to build a safety net around user funds. Self-custody or licensed custodian services should be actively used to store digital assets wherein the users have complete control of their funds…We will see the evolution of institutional-grade infrastructure to meet regulatory, operational, and compliance requirements while providing access to on-chain servic
es, enabling interoperability across chains, and helping organisations integrate digital assets into their business operations."
Vantage: Marc Despallieres, chief strategy and trading officer
"While cryptocurrency's autonomy contributed to its surge in popularity, the uncontrolled environment in which it operates has had the opposite effect. The prices did gradually stabilize with the implementation of rules and actions taken to protect the interests of cryptocurrency users. However, because there is still a lot of ambiguity in this volatile market, active investors in this sector are still concerned. The advent of India's G20 presidency might bring in some level of clarification on taxation and advisory norms."
Kunji: Anurag Dixit, founder
"2023 will be the year of cleanups and structuring the scraps of unfaithful and mismanaged players left in the market. While prices will tend to further lows, multiple small rallies will continue and provide opportunities to make a profit. Resilient projects will continue to show outlier performance as well. Intense Global regulatory and taxation coordination will be two major themes that'll play out in 2023."
UniFarm: Tarusha Mittal, COO and co-founder
"The FTX collapse is good on the macro level for the industry, as users will yet again realize that Web3 is all about decentralization. The companies that don't have a strong foundation and have strong investments will be flushed out. Only real business models will thrive. FTX collapse is a good reminder that crypto is all about removing centralized bodies…The government should frame strong regulations for the sector in light of the FTX crisis- especially for centralized bodies dealing with crypto."
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First Published: Mon, December 26 2022. 11:38 IST


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