New user registrations are a matrix used to rate crypto companies.
Investors have become nervous after the government decided to introduce the Cryptocurrency and Official Digital Currency Regulation Bill, 2021 in the upcoming winter session of Parliament.
The bill seeks to ban all private cryptocurrencies in India, but allows “certain exceptions to promote the underlying technology and its uses.”
Crypto exchanges have seen a 15-50% drop in new listings in November so far.
They also saw a decline in their monthly trades after some investors battled positions and adopted a “wait and watch” mode.
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“We have seen a 20% drop in new registrations week over week. We have had an average daily registration rate of 8,000 to 10,000 per day during the recent bull cycle. Currently, we are getting around 5,000-6,000 new users every day,” said Shivam Thakral, CEO of BuyUcoin.
Sources told ET that even some of the biggest exchanges such as CoinSwitch Kuber and CoinDCX have been affected.
A few major exchanges, however, claimed that they had not seen major changes, particularly in the trading patterns of mature investors.
“We haven’t seen any significant change in these numbers on our platform since we largely cater to retail investors who invest for the long term,” said Ashish Singhal, CEO of CoinSwitch Kuber.
Many investors appear to be opening additional accounts to sell the crypto assets they hold, insiders say.
“We have seen an increase in listings because people who already held crypto assets through mining or through payments are selling them. So we see some of the new members depositing the cryptos, selling them, withdrawing the money and depositing it in their bank accounts,” said Sathvik Vishwanath, co-founder and CEO of Unocoin, a cryptocurrency exchange.
Smaller exchanges said they were seeing steady listings as people continued to be curious about the new asset class, despite price swings last Tuesday after the government moved to regulate the sector.
“We are currently seeing an average daily signup rate of around 4,000 per day,” said Vikas Ahuja, member of the Blockchain and Crypto Assets Council (BACC) and CEO of CrossTower, a cryptocurrency exchange.
Industry trackers said trading volumes have increased over the past few days as investors rush to sell crypto assets, but that has declined since Saturday.
“Trading volumes have doubled, but that happened for the first two or three days, and we haven’t seen it since Saturday. The people who panicked are already out and it could remain stable until let there be more news on the bill,” Vishwanath said.
Young investors started investing in cryptocurrencies during the lockdown when businesses largely moved to work from home.