Indian Crypto Market Shifts Towards Futures Amid Taxation

The Indian cryptocurrency market has seen a significant shift towards futures and derivatives trading. According to reports, more than 80% of crypto trading on Indian exchanges now comes from futures and derivatives instead of regular spot trading.

This change is attributed to the 1% Tax Deducted at Source (TDS) introduced in the 2022 Union Budget on every crypto spot transaction. The tax has made frequent buying and selling difficult for traders, prompting many to move to crypto futures, which are exempt from this tax.

However, industry estimates suggest that 70-80% of Indian retail traders in crypto derivatives are currently losing money due to the high leverage offered by some exchanges. Traders can now access up to 100x leverage on their trades, making a small price move enough to wipe out an investor's entire trade.

Experts estimate that Indian retail traders lost over $12 billion trading equity derivatives in a single year, highlighting the risks of highly leveraged trading.