State of the Indian investment market and beyond.
So, this week we published an answer on Quora about the unpopularity of the crypto market in India compared to the west. There we went about how the Indian attitude towards investment and people’s aspirations towards money are hindering the true potential of the Indian crypto market. Due to the nature of a Quora answer, we didn’t go into much detail there. And hence, this article is right here!
Investment is a complex subject. The naive few think they will find a new cryptocurrency every week to double and become a multimillionaire in a few months. Then there are the sceptics and contrarians who doubt the whole market and any other investment market and are happy with their salaries. Nothing wrong with that per se. You do with your money what you deem fit.
However, in all this, there is a caveat: Are the expectations from the crypto market realistic? And if so, how can it impact the mindset of the crowd towards the market.
To determine the results of an experiment, we first have to determine what the baseline value of the sample is. The average person in India isn’t a big earner. The data on the average salary of an Indian is inconclusive, but most sources put it around INR 20–30k per month. That translates to roughly $270–405 per month. Subtract the cost of living in accordance to different areas. Add the fact that a lot of the Indian population is children who don't earn, and the amount a person saves is negligible. There is a lack of studies on the number of people who live paycheck-to-paycheck in India, but the proportions would be high.
So, the average Indian doesn't earn much, and the pressure of financing one’s family leaves not a lot. But if statistics are something to go by, Indians earn enough cumulatively to buy gold. This article by Forbes gives a good insight into the world of Indian gold investment. The Indian gold market is focused on resale ability and the cultural aspects of gold in India.
There is a void to be filled here. If the majority of Indians aren’t into investment yet, there is room for crypto to become an integral part of the investment life. So, how to introduce crypto to the average user? Making content aimed towards the less tech-savvy populace and introducing them to crypto is an obvious first step. India is a vast country, and a vast country needs a lot of content aimed towards educating the average person in finance. The expectations from an investment are always high. There must be a real picture of what the investor must expect. A lot of Indians see the share market as a place to lose money, and this thought process might leak to the crypto world if the sector isn’t careful. Good education always goes far in introducing concepts to the masses.
There have been attempts by big cryptocurrency exchanges to introduce themselves to the Indian market through advertisements. These efforts, when prompted repeatedly, create a sense of familiarity with the product. Government operations in the past few years have brought a lot of people into the banking circle, and most of them are now getting familiar with how money works. Access to dirt cheap internet has given the youth access to never-seen-before financial instruments like digital wallets.
Last year during the lockdown, after seeing the surge in the share markets, a lot of people familiarised themselves with the share market. Sure, there is still a level of caution with the field, but it isn’t seen as something elusive, reserved for only the mega-rich. Progress is there, but results will be seen only in the coming few years.
Closing thoughts:
Cryptocurrency is a volatile field. One day your favourite currency is at an all-time high, and the next day it is dirt cheap. Getting people to accept anything new is hard work, and this is money we are talking about. There will always be those who prefer the good old days of everything. There would always be that one contrarian who would just reject the concept of money altogether. Staying within the norms and then educating people about the field is the best bet for now.
El Salvador sets an example that good intentions at bad timing would result in mixed results. El Salvador is by no means the most prosperous nation, similar to India. The people think that the transition is too early, and there is now an economic distrust among some sections. It’s almost a cliche at this point but still: slow and steady wins the race.
