It is widely referred to as a crypto meltdown, and it is not limited to one region.
Due to financial constraints, Singapore-based Vauld, a crypto trading, and lending platform, recently prohibited its users from withdrawing cash. In another situation, cryptocurrency broker Voyager Digital declared bankruptcy. Huobi Thailand closed its doors on July 1. And the list is still expanding. Back home, bitcoin companies are groaning under the weight of government taxation. “There is no sustainability if we look at the entire crypto market infrastructure.” It’s all shivering, and the entire algorithm is broken.
We lack a robust mechanism for sustaining ourselves in the global market. The imposition of the levy has stifled the liquidity required by markets. Trading volume has decreased as investors opt to keep their positions, according to Raj A Kapoor, founder of the India Blockchain Alliance, a think-tank.
Nevertheless, the one percent tax deduction at source (TDS) on virtual or digital assets and cryptos for trades exceeding Rs 10,000 has resulted in a 70%pdrop in trading volumes across major Indian exchanges. According to Kapoor, this has hampered the industry’s growth.
Prior to the current market crash, the price of cryptocurrencies like Bitcoin reached $67,000 in early 2022. The cost had increased from $6,000 in 2020. Recent events such as Celcius, Luna, Axie, Vauld, and Voyger revealed how vulnerable the market is to shocks and manipulation, as well as the extent to which an unregulated economy may harm the public.
“We are witnessing the crypto-economy continue to lose credibility unless the government acknowledges its presence and regulates to protect the interest of Indian investors. During crypto winter there will be no Christmas without government intervention,” Gaurav Mehta, founder, Catax- Simple Crypto Taxes, an online crypto tax solution, said.