Bitcoin has made headlines again, reaching an all-time high of $89,915 with a year-to-date gain of over 105%, bringing its entire market capitalization to $1.74 trillion. This rise has boosted trading activity on Indian cryptocurrency exchanges, which had earlier seen volumes fall by 90% due to a 1% Tax Deducted at Source (TDS) and a reduction in Bitcoin's value.

"We're seeing a major uptick in trading," says Mridul Gupta, CoinDCX Founding Partner. "Our 24-hour trading volume is now $21 million, with a peak of $36.5 million on November 10, up from $5.8 million prior to November 6." This is more than five times greater than the same period last year, when volumes were approximately $4.35 million."

With this increase in volume, Indian crypto exchanges are seeing a spike in revenue, rebounding from the drop caused by TDS and market swings. Vikram Subburaj, Founder of Giottus Crypto Exchange, stated, "We've experienced a fourfold rise in revenue and volumes compared to when they collapsed by 90%. Our daily volumes are currently $2 million, up from historical lows of $500K."

In 2021, India's cryptocurrency exchanges thrived with record trade volumes, and their founders rose to prominence. However, after a 30% tax on cryptocurrency gains and a 1% TDS went into force on February 1, 2022, trading volumes fell dramatically. The collapse of large cryptocurrency platforms such as FTX, combined with rising interest rates, exacerbated the market decline.

The current increase in crypto is being driven by Donald Trump's victory in the US elections, which could result in favorable regulatory reforms given his pro-crypto stance. Other factors, like as the adoption of ETFs in other markets and the Bitcoin halving event, have already propelled the gain. 

Balaji Srihari, Business Head at CoinSwitch, says, "We're seeing a substantial spike. Our peak hourly traffic has surged by approximately 7x, new user signups are up 4x from the previous week, and trade volume has increased by 9x. This demonstrates renewed interest and participation in cryptocurrency."

Despite the rise, Indian exchanges continue to face competition from international platforms, as many investors prefer to trade abroad to avoid TDS. "While tax policies have impacted Indian exchanges, many investors have shifted to global platforms," Gupta says. "However, with new guidelines from the Financial Intelligence Unit (FIU) on foreign exchange registration in India, we're seeing a trend of investors returning to domestic exchanges."

While opinions on cryptocurrency have always been mixed, crypto trading in India fell only after high taxes were implemented. With transaction volumes increasing at crypto exchanges, care is advised.

Former State Bank of India chairperson Arundhati Bhattacharya, who is now the Chairperson and CEO of Salesforce India, added "There are a couple aspects of cryptocurrency that I don't believe in. One is that their worth is not judged by any single authority. It merely moves up and down. You cannot predict whether it will be ₹10,000 today, ₹100, or ₹10 tomorrow. So, in that sense, it is similar to any other commodity," she told in a previous discussion. The second thing she mentioned was that crypto security is another source of concern. "You don't know if someone can hack in. You don't know if the folks who are supplying it will simply disappear in a puff of smoke."

The Oracle of Omaha reportedly stated during Berkshire Hathaway's 2022 annual meeting that if someone offered him all of the Bitcoin in the world for $25, "I wouldn't take it, because what would I do with it?"