As China declares all cryptocurrencies illegal, the asset class again started declining on Friday and Saturday. Following the market movement, several Indian investors rushed to squaring off their position in smaller cryptocurrencies, while others decided to refuge in safer cryptocurrencies like Bitcoin and Ethereum.
As per the market analysts, the transaction volume of top Indian crypto exchanges surges around 50 percent, within two days.
It has been reported that most of the crypto trading platforms in India saw a rush to sell smaller cryptocurrencies. Compared to the veteran Indian investors, the new entrant in the market reacted vigorously to the news flown from Beijing.
“The largest sell-offs we’ve seen are in the biggest gainers as investors are likely to cash out their investments in assets like Cardano, Solana, Matic and the like,” said Shivam Thakral, the CEO of BuyUcoin.
The experts have further informed that only a small percentage of investors have alleviated their portfolio position by selling off Bitcoin.
Some of the investors in the market switched their investments from smaller cryptocurrencies to Bitcoin and Ethereum.
Initially, Bitcoin was the only cryptocurrency, in which the Indian crypto investors were putting their money. But this year, as new-age investors entered the market, they started investing in smaller cryptocurrencies, too.
According to the reports, several crypto exchanges believe that the impact of China’s latest decision would be temporary on the crypto industry. However, it has also been mentioned that before settling down, the market might experience more panic selling.
George Zarya, chief executive at digital asset brokerage and exchange Bequant, said, “China has been known to go to extremes with either very assertive statements and prosecutions or complete radio silence. This time, the point was made very clear, that China will not support cryptocurrency market development as it goes against its policies of tightening up control over capital flow and big tech.”
He further added that the institutional crypto industry would not experience many changes after China’s recent announcement, because those who wanted to leave the market have already left. Also, those who could not leave the market have either closed their operation or have changed their radar.
It is being expected that the retail market has changed its radar to support the market volume.
China is considered to be the biggest player in bitcoin mining, but after the country imposed a ban on crypto-mining activity, many of the firms shifted their operations to other countries.
Presently, China is working on its CBDC’s pilot project, soon the country will introduce it. Therefore, the market experts are hoping that Beijing would not take more extreme steps, now.
Thakral, recently said, “The Chinese central bank has been lobbying against crypto for a very long time. This recent move wasn’t a surprise to many people as everyone saw it coming. But we hope China will reconsider its decision and create a healthier environment for crypto enthusiasts moving forward.”