India may have missed the Bitcoin rush as per official Bitcoin (BTC) holding data. The US holds around 198,109 BTC worth $20.67 billion, Bhutan holds 11,055 BTC worth $1.15 billion while Jetking, India’s only public Bitcoin holding, owns 12 BTC worth $1.2 million, as per Bitcoin Treasuries website.

Even representational trading volume data maintained by few crypto exchanges like CoinDCX show that Bitcoin’s 24 hour trading volume in INR stood at around ₹8.57 crore while in USDT it stood at around $2 billion, as of 2 PM on January 19.

While some may argue that this is not a proper representation of India’s role in the Bitcoin space, Sidharth Sogani Jain, Founder of Crebaco and CEO of Blue Aster Capital, explained that it is difficult to get a number of India’s exact BTC holding since most Indian user data is assumption-based.

“Even individuals and companies that own Bitcoin don’t really own it. The exchanges will own Bitcoin. It’s like giving someone money to invest in a company. India’s crypto exchanges are not certified custodians like the NSDL. So, there has to be a custodian structure where you rely on a third party regulated by the government or you should own your own keys to own the Bitcoin,” he said.

On the question of India’s Bitcoin share, Jain added, “India definitely does not figure into those nations that own this cryptocurrency because there is no regulation on this.”

Similarly, Sumit Gupta, Co-founder of CoinDCX agreed that India does not currently rank among the countries riding the Bitcoin wave.

However, claiming a nuance, he said, “Bhutan, Abu Dhabi, Japan, the UK, and US have leveraged unique geographical and economic advantages to build significant Bitcoin reserves. Bhutan has used its abundant hydropower resources to mine Bitcoin. Similarly, Abu Dhabi’s cheap energy costs have made it a key player in Bitcoin mining. Bitcoin mining thrives in regions with access to affordable electricity, renewable energy sources, and cold climates to offset the heat generated during mining. India’s high electricity costs and climate challenges make large-scale Bitcoin mining less economically viable.”

However, he added that India’s retail crypto adoption rate is among the highest in the world. What acts as a barrier to more investment is the lack of clear regulations.

“If India establishes a robust regulatory framework, it could unlock significant institutional participation, helping the country leapfrog into becoming a Web3 superpower. Over the next five to ten years, as more countries consider holding Bitcoin as a strategic reserve, India has the potential to align itself with this global trend, provided it capitalizes on its strengths and addresses current roadblocks,” said Gupta.

A similar notion was voiced by Rahul Pagidipati, CEO of ZebPay crypto exchange, in 2021 as well. At the time, he estimated Indians to own less than one per cent of the world’s Bitcoins, in a representation submitted to the Indian government.

“We risk facing a Bitcoin gap, where we lag behind countries like China, US, Japan, and others who have moved ahead on regulation. If Bitcoin becomes a reserve asset by 2030, when India may be the third largest economy, would we have the third largest bitcoin holding? Passing healthy regulation in 2021 would protect and reassure investors and allow Indians to claim their fair share of this vital asset,”said Pagidipati. By 2025, India is yet to hear of any progress from the government in terms of crypto regulation.

India may brige the gap yet

Pranav Agarwal, Head of Investors at Foundership, an accelerator venture capital, said that while India is late to the crypto trend, it has not yet missed the boat. He pointed out that in case of the US and UK, most Bitcoins were seized from illegal activities or stolen Bitcoins.

“Their assets are not investments while Bhutan and El Salvador are actively buying bitcoin with the nation’s money. In that case, we are still early as a nation,” he said.

Agarwal said that the time is right for India to buy Bitcoin on the government’s balance sheet and bringing in a set of regulations allowing individuals and companies to buy Bitcoins on their balance sheets as well.

“It is high time we looked at a crypto regulation and considered at bitcoin as a strategic national reserve. In the next 2 years we are expecting multiple countries to begin disclosing their Bitcoin strategies and reserves. So, what we really need today is regulation and a favourable treatment for owning and trading and investing in cryptocurrencies,” he said.

Agarwal also suggested a platform or regulator to allow blockchain companies to operate in India.

Bitcoin commerce still a pipe dream

When asked about Bitcoin commerce, Agarwal said that India currently has no incentive to consider the same since the current capital controls policy does not allow free movement of capital across borders. However, there may still be scope for micro transactions with KYC norms or transaction limitations on Bitcoin payments, he said.

On the other hand, Ashish Singhal, Coinswitch Co-Founder, said cryptocurrency as a way of commerce is not a viable solution in India right now.

“Commerce is still a far off thought. Bitcoin is treated as a gold reserve in a way. We have a good financial ecosystem and would not want a second financial ecosystem. Crypto remains as an investment asset class. While many countries would find it suitable for commerce, in my opinion this is not the path for India,” he said.