82% of WazirX’s volumes were down, according to information from the crypto research and consultancy firm Crebaco. On CoinDCX, the fall was approximately 70%, while on ZebPay, it was 76%.
Since trading volumes are normally lower on the weekends, according to crypto exchanges, it is still too early to determine the exact impact of tax deducted at source (TDS), but other industry analysts predicted that pressure will likely continue on trade.
Senior crypto analysts anticipate that the newly implemented TDS of 1% on the sale and transfer of virtual digital assets will force day traders to leave Indian exchanges and rethink their game plans.
Last year, volumes on cryptocurrency exchanges exploded thanks to persistent investor interest. Industry estimates state that the top five to six Indian crypto platforms handled a combined trade volume of $70-100 billion in 2021, with WazirX alone handling roughly $43 billion.
Due to the persistent worldwide macroeconomic conditions, industry experts anticipate that the bear market will further worsen the fall in trade activity.
While some exchanges have the financial resources enough to weather the current market, a few are also thinking about branching into other industries or looking into foreign markets. By the end of the year, the cryptocurrency trading platform Coinswitch Kuber should introduce its first financial service.
According to Crebaco, the industry that has been severely impacted by new tax legislation that was implemented during the union budget this year has already seen volumes fall by 40–80% in June compared to March. The major way that exchanges make money is by charging a fee for each trade that is made.