Indian investors’ confidence in crypto startups: how can they be restored?
Compared to this time last year, Indian crypto investors are far more confident. The market has been overtaken by dread and caution as a multi-year bull run in cryptocurrency over the past few years has come to an end.
Indian cryptocurrency investors were thought to number about 20 million during the height of the bull market. Many investors have been discouraged from investing, which has had a negative impact on investor confidence. A few onerous tax regimes have been implemented, particularly with regard to cryptocurrency trading.
Even while such circumstances are never ideal, this is also a moment for Indian cryptocurrency businesses and investors to pause and reconsider their strategies. Experienced investors now recognize that volatility is a given in the market and that possibilities to create wealth are only accessible to those who have a long-term perspective. Likewise, cryptocurrency startups must act. Although the market may be experiencing a downturn, there is unquestionable long-term promise in this sector. However, only forward-thinking businesses with robust business strategies would be able to gain from the same.
For startups prepared to double down and create such businesses, the current downturn presents an excellent opportunity. After all, every previous crypto winter ended with a bull market and higher cryptocurrency highs.
So what precisely can cryptocurrency firms in India do?
Keep Building and Innovating
It is frequently asserted that bear markets are the ideal period for construction.
Companies should focus on developing innovative goods and businesses that bring value to industry stakeholders rather than focusing on price actions or keeping up with the most recent buzz in the market.
We haven’t seen any solid goods that have gained wide acceptance in cryptocurrency outside of exchanges. There are many businesses that are headed in the right direction, but they will need to keep innovating if they want to survive these trying times. Startups will need to remain quick on their feet and constantly respond to market developments as it is anticipated that the issues around taxes and the legality of cryptocurrency will be resolved in a few years.
As this happens, it should lead to innovation that promotes adoption and better times for the industry as a whole. This was seen in previous market downturns. Every time we’ve had a crypto winter, it’s stimulated innovation on all fronts. In fact, during the last adjustment, layer 2 scaling techniques gained in popularity.
Control your cash flow, improve your risk-taking, and work toward durable company structures.
We had witnessed businesses toss money away carelessly on riskier investments and marketing during the bad market. Sadly, logic and reason had fallen by the wayside due to an excess of investor money and tremendous market enthusiasm.
Unfortunately, numerous businesses were forced to deal with serious repercussions as a result of the market collapse, including closing down or scaling down their expansion ambitions. This indicates blatant managerial failure and a dearth of effective risk-management techniques. It should be prioritized to achieve sustainable growth.
It is crucial that businesses be lean and conservative with their cash and investments at this time since we are in a bear market. To survive the bear market and keep on developing, they would need to manage their financial reserves carefully and guarantee a large enough runway.
Cooperate with government officials and industry stakeholders
Currently, the government and regulatory organizations in India have many onerous tax regulations and provide little clarity. While it is simple to stand by and condemn the government, collaboration with industry players and the government is really more essential to fostering good developments in India’s crypto business. The regulations will be developed over the course of the following several years because cryptocurrency is still in its early stages.
By assisting the government in better comprehending the complexities of the sector and aiding in the development of regulations that are advantageous to all stakeholders, crypto entrepreneurs may play a significant role.
Continue educating people about cryptocurrencies to encourage adoption
The general public’s understanding and use of Bitcoin and other cryptocurrencies have significantly increased during the previous bull run. But there is a long way to go before broad adoption.
People require a lot of education to help them comprehend both the promise and the hazards of this area. It is crucial that the general population be aware of the advantages that cryptocurrency may have in their life in addition to the price and price changes.
India’s potential in the global cryptocurrency market can only be realized with more knowledge and adoption, thus companies must take the initiative to take the necessary actions.
edited and proofread by nikita sharma