WazirX Says 2022 Saw 76% Fall In User Trading Volumes

The year 2022 is said to be a brutal year for digital assets. According to crypto platform WazirX, it recorded a 76 per cent fall in users trading volumes from the beginning of this year to November 2022.

In January-November 2021, the exchange had clocked $ 43 billion in trade volumes fuelling a hope of growth in digital assets, but 2022 was seen completely shattering the positive hopes with its recorded trading volumes.

WazirX, bitcoin and cryptocurrency exchange stated, “After five years of consistent efforts to provide easy crypto access to users, we witnessed market sentiments reaching an alarming low. This was  in contrast to the positive sentiment we saw in the last few years, especially in 2021, when crypto saw its best bull run ever.” Reports claim that the massive downturn came with the collapse of several large enterprises, which included FTX, Terraform Labs (creator of TerraUSD), Celsius Network and Voyager Digital, to name a few.

Commenting on the regular uncertainty of crypto, WazirX said that the country was still on the brink of an uncertain future when it comes to crypto, with no regulations to protect users in case of massive losses in the portfolio or bad actors who run fraudulent businesses to trap vulnerable investors. It may be recalled that the Union Budget 2022-2023 introduced a 30 per cent tax on virtual digital assets profits and a one per cent tax deduction at source on all crypto transactions. 

Stating on the newly imposed tax, WazirX said, “This factor also significantly affected volumes for us and other market players. Following the imposition of taxes on virtual digital assets, investors started pulling out because their gains would not be for them to keep, resulting in an unfavourable situation."

The report noted a drastic decrease in the number of trades per day as compared to the last year or even the previous month, with effect from the tax imposition since April 2022. Amidst the downfall, WazirX listed Elon Musk’s acquisition of Twitter as one of the triggers for trading volume jumps during the year. “News of Musk offering to buy Twitter started floating in mid-April. The trading volume of dogecoin on WazirX went up by 1,300 per cent compared to the previous week,” it said.

However, towards the end of October, when the Twitter acquisition by Elon was near completion, the trading volumes went up significantly by 3,000 per cent despite low trading volumes in the previous few weeks, it further added.

The report also found that women investors in the age group of 41 to 60 years traded more actively in cryptos than men. Also, women investors showed more interest in high-value tokens. Whereas, male investors showed interest in a wider range of cryptos and even bought meme tokens and gaming tokens, in addition to blue chip tokens.