In the quiet streets of Nagpur, a city nestled in western India’s Maharashtra state, Ashish Nagose spends his mornings arranging red roses and marigolds at his family’s flower shop. By evening, he’s immersed in a very different world—one of digital wallets, blockchain ledgers, and volatile price charts. Like thousands across India’s tier-2 and tier-3 cities, Nagose has turned to crypto trading as a financial lifeline amid stagnant job markets and unpredictable income streams.
Just two months ago, Nagose was trading stock options—a common pursuit for retail investors seeking higher returns. But tighter regulatory scrutiny on derivatives trading in India pushed many like him toward cryptocurrencies. “I want to run my family shop,” Nagose said, “but trading can provide a steady income when business slows down—like after Diwali.”
A Surge in Retail Participation
India’s cryptocurrency market is witnessing explosive growth, particularly outside major metropolitan hubs. Data from CoinGecko shows that trading volumes on the country’s four largest crypto exchanges more than doubled quarter-on-quarter between October and December 2024, reaching $1.9 billion. This surge isn’t being driven by institutional investors or hedge funds—it’s fueled almost entirely by young retail traders from cities like Jaipur, Lucknow, and Pune.
CoinSwitch, one of India’s leading crypto platforms with over 20 million users, reports that seven out of the top 10 cities driving crypto adoption in 2024 were non-metros. Balaji Srihari, Vice President at CoinSwitch, confirms: “Growth is now being driven by lower-tier cities. That’s true for stocks—and it’s definitely true for crypto.”
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This trend reflects broader economic realities. Despite India’s GDP growing at around 6.5% in FY25—among the fastest in the world—employment opportunities and wage growth have failed to keep pace. With nearly two-thirds of the population under 35, millions of young Indians are searching for alternative income sources beyond traditional jobs.
From Stock Options to Bitcoin: A Natural Shift
The migration from equities and derivatives to crypto has been accelerated by regulatory changes. In late 2024, Indian authorities tightened rules on options trading, increasing margin requirements and imposing stricter position limits. These moves made short-term trading less accessible for small investors.
Meanwhile, global momentum around crypto has intensified. Following Donald Trump’s November 2024 U.S. presidential election victory, optimism surged over potential regulatory easing in America. Bitcoin crossed $100,000, Ethereum rallied, and meme coins like Dogecoin saw renewed interest—ripples felt even in India’s interior towns.
Edul Patel, co-founder of Mudrex, an Indian crypto exchange, noted: “There’s immense curiosity at the grassroots level… especially with the shift in global sentiment post-election. People see crypto not just as an investment, but as a tool for financial empowerment.”
Grassroots Education Fuels Adoption
In Nagpur, Yash Jaiswal runs the Thoughts Magic Trading Academy out of a modest storefront. Every weekday morning, around two dozen students—ranging from college graduates to government clerks—gather to learn technical analysis, risk management, and blockchain fundamentals.
Jaiswal, once an equity options trader himself, has trained approximately 1,500 individuals over the past two years. A bold poster hangs on the classroom wall: “You’re just one trade away from your dream life.”
For 25-year-old mechanical engineer Sagar Neware, those words carry deep meaning. Earning ₹25,000 ($288) monthly at a transport office job, he dreams of restarting his father’s defunct plastic packaging business. “Crypto trading isn’t gambling for me,” he said. “It’s my second income stream—and maybe my ticket to entrepreneurship.”
Why Smaller Cities Lead the Charge
Several factors explain why smaller cities are outpacing metros in crypto adoption:
- Lower cost of living: With fewer expenses, residents can allocate disposable income toward high-risk, high-reward assets.
- Digital penetration: Affordable smartphones and cheap data plans have democratized access to trading apps.
- Community learning: Local academies and peer networks reduce the knowledge barrier.
- Economic frustration: Limited white-collar jobs make alternative income avenues highly attractive.
Kush Wadhwa, Partner at Grant Thornton Bharat, projects India’s crypto market will grow from $2.5 billion in 2024 to over $15 billion by 2035—a compound annual growth rate of 18.5%. “Retail participation is the backbone,” he said. “And it’s only beginning.”
Regulatory Uncertainty Looms
Despite rising popularity, cryptocurrency regulation in India remains ambiguous. The government imposes a steep 30% tax on crypto gains—one of the highest globally—and levies an additional 1% TDS (tax deducted at source) on all transactions. Yet, there is no comprehensive legal framework governing ownership, trading, or use cases.
Unlike most G-20 nations, India has not classified crypto under securities law nor established a dedicated regulatory body. While the Securities and Exchange Board of India (SEBI) signaled openness to oversight in mid-2024, no formal action has followed. Meanwhile, the Reserve Bank of India continues to issue warnings about macroeconomic risks tied to widespread crypto use.
“Widespread usage of crypto assets and stablecoins has consequences for macroeconomic and financial stability,” stated the central bank in its December 2024 Financial Stability Report.
This lack of clarity creates both opportunity and risk. On one hand, it allows innovation to flourish organically. On the other, it leaves millions of novice traders vulnerable to misinformation and market swings.
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Frequently Asked Questions (FAQ)
Q: Is cryptocurrency legal in India?
A: Yes, cryptocurrency is not banned in India. However, it is not recognized as legal tender, and traders face a 30% tax on profits plus a 1% TDS on every transaction.
Q: Why are people in smaller Indian cities turning to crypto?
A: Limited job opportunities, low wage growth, and rising digital access have made crypto an appealing side income option for youth in tier-2 and tier-3 cities.
Q: Can I start crypto trading with a small budget?
A: Absolutely. Many Indian exchanges allow users to begin with as little as ₹100 ($1.20), making entry accessible even for low-income individuals.
Q: How are people learning to trade crypto?
A: Through local training academies, YouTube tutorials, peer groups, and mobile-first platforms offering gamified learning experiences.
Q: What role do global events play in India’s crypto trends?
A: Events like U.S. elections or ETF approvals influence global prices and investor sentiment—directly impacting Indian retail traders who follow international markets closely.
Q: Are institutional investors involved in India’s crypto market?
A: Currently, retail traders dominate the market. Institutional participation remains limited due to regulatory uncertainty.
The Road Ahead
India stands at a crossroads. On one path lies formal regulation that could legitimize crypto as part of the financial system, protect consumers, and integrate digital assets into mainstream investing. On the other is continued ambiguity—a gray zone where innovation thrives but risks multiply.
For now, millions like Ashish Nagose and Sagar Neware are writing their own financial stories—one trade at a time.
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As long as jobs remain scarce and incomes stagnate, the allure of crypto will persist—not just as an asset class, but as hope disguised in blockchain code.