Indians Have Rejected Crypto. But 2025 Could Change That

Of the salaried men and women surveyed in the BankBazaar Moneymood 2025 study, only 12 per cent of Indians invested in crypto in 2024, compared to 32 per cent in 2022​

Crypto’s appeal, once driven by speculative mania, has been dulled by heavy taxation, regulatory uncertainty, and its inherent volatility.

Source : Pexels

By AR Hemant

The BankBazaar Moneymood 2025 survey report reveals a sharp decline in Indians’ interest in cryptocurrency. Of the salaried men and women surveyed in the study, only 12 per cent of Indians invested in crypto in 2024, compared to 32 per cent in 2022​. Parallelly, we see another trend towards safer, regulated assets like mutual funds, fixed deposits, and gold. For instance, mutual fund SIPs captured 62 per cent of savers in 2024, while gold saw a resurgence with 23.3 per cent returns​. Crypto’s appeal, once driven by speculative mania, has been dulled by heavy taxation, regulatory uncertainty, and its inherent volatility. But could 2025 revive India’s crypto enthusiasm? Let’s examine this story.

Taxation and Security Concerns Hurt Crypto

The Indian government’s 30 per cent tax on crypto gains, paired with a 1 per cent TDS on transactions, has made trading prohibitively expensive for most. This, coupled with a lack of clear regulations, has created a high-risk environment, scaring off retail investors. Security breaches and scams further eroded trust, with incidents in 2024 costing Indian investors dearly. Without robust safeguards, the crypto ecosystem remains vulnerable, leading many to abandon it for less risky financial instruments.

Why 2025 Might Be Different

Despite past setbacks, crypto could see a resurgence in 2025. Bitcoin’s all-time high has captured global attention, and institutional investors are entering the market, adding credibility. Additionally, a landmark court ruling recognising crypto as an asset class could push the government towards clearer legislation, boosting investor confidence. Falling interest rates globally also favour speculative assets like crypto. With prominent figures like Elon Musk and Donald Trump adding to the buzz, the sector is positioned for a comeback.

The Risks Remain High

Crypto’s volatility continues to be its most significant risk. Prices can skyrocket one day and plummet the next, leaving even seasoned investors vulnerable. The lack of regulatory clarity means there’s little recourse in cases of fraud or mismanagement. Moreover, the Indian government has shown no interest in embracing crypto and the central bank has on many occasions warned consumers against it. This has contributed to the negative perceptions which could stifle long-term growth. These factors make it essential for investors to proceed with extreme caution.

A Safe Way to Approach Crypto

For those considering crypto, a measured approach is critical. Use trusted platforms with strong security protocols, and never let crypto exposure get to a point where you would be at risk of being financially wiped out. For example, if you have a Rs 1 crore portfolio and you can stand to lose only Rs 1 lakh, invest only 1 per cent of your portfolio in this asset class. Avoid borrowing to invest, as the speculative nature of the market makes it unsuitable for leveraged positions. Most importantly, understand that crypto is a gamble—it can deliver outsized gains but also, wipe out your capital.

Crypto’s decline in India is because of cautious policymaking, infosecurity problems, and market realities. However, improving global sentiment and potential legislative clarity could change the game. While the sector remains speculative and risky, it could appeal to investors with a high-risk tolerance looking for diversification. Balance and prudence will be essential for navigating this unpredictable space. For now, approach with care, and remember: growth is enticing, but security comes first.

(The writer is Head of Communications, BankBazaar.com and the co-author of the money management guide, ‘The Bee, the Beetle and the Money Bug’. This article has been published as part of a special arrangement with BankBazaar)