India is developing an appetite for crypto-derivatives, even as the country’s Supreme Court is still deliberating on the exchange industry’s future.
“We witnessed a huge demand for futures trading among Indian crypto users [in early 2020],” said CoinDCX CEO Sumit Gupta, founder of an exchange aggregator.
Meanwhile, since 2018, the Indian exchange Unocoin has been embroiled in a court case regarding the proper fiat on-ramps regulations. Cofounder of Unocoin Sathvik Vishwanath agreed, saying:
“while we believe it is pretty much the time to launch a derivatives market, the restrictions from Reserve Bank of India on banks is making the on-ramp and off-ramp complicated and is keeping the average customer away.”
Vishwanath said the exchange still serves 26,000 active users monthly in India with a crypto-only platform, and plans to launch options for derivatives within the next few months.
Similarly, Pankaj Balani, CEO of Delta Exchange, said his team in Mumbai is focused on growing the derivatives offered in 2020, thanks to his previous experience in trading derivatives for Union Bank of Switzerland before the crypto exchange was founded in 2018.
In fact, Delta Exchange launched new exotic options in bitcoin and ether this week, allowing users to take leveraged bets on the size of the price moves of the cryptocurrencies.
“We see derivatives are one of the areas that is really under-penetrated in crypto,” Balani said. “If you look at daily FX trading … derivatives are four to five times the size of spot markets, but in crypto this isn’t true yet.”
150 Percent Growth in Crypto-Related Activities
Cashaa CEO Kumar Gaurav said his online banking platform is now seeing a monthly increase in crypto activity of more than 150 per cent. As such, he estimates that these Indian clients are involved in trading in daily volume up to 1,000 bitcoin, primarily from over – the-counter trading desks looking to get into the adjacent crypto-derivatives boom.
“I expect this trend will continue and anticipate strong demand for crypto options from India in 2020,” Gaurav said. “Before the regulatory hurdles, Indian exchanges were doing $50-60 million in daily volumes and we can expect this volume to come back soon.”