Bitcoin, Dogecoin most held cryptos in India in 2022

Memecoins, which are often said to be volatile and risky investments, remained among the favorites for Indian retail crypto investors in 2022. According to a report by crypto exchange Coinswitch, which claims to have more than 19 million users, two of the top four most held crypto assets in India were memecoins.

The report, published on Wednesday, said that Bitcoin was the most held crypto asset, with 12% of users opting to invest in the world’s most valuable crypto asset. This was followed by Ethereum, Dogecoin and Shiba Inu, which saw investments from 11.54%, 9.43% and 6.92% users, respectively. Dogecoin and Shiba Inu fall under the category of memecoins, which are inspired by popular internet memes.

Experts have often noted that the appeal of meme coins often comes from popular culture, and their value can drop almost as fast as they rose. In contrast, serious tokens like Ether and Bitcoin have underlying platforms that are being used to build other web3 applications, and hence derive value from such use-cases.

Interestingly though, the report also found that investors in India held on to their assets and avoided panic selling despite the recent crash in crypto prices. It said that retail investors in India have built a crypto portfolio and added tokens to increase equity. Around 40% of crypto investments during the year were made on tokens with utility, while memecoins accounted for 13.14% of total investments. 

Only 6% of investments went to tokens related to metaverse applications, like Axie Infinity or Decentraland. The two metaverse games are driven by the AXS and MANA token that had gained popularity after Mark Zuckerberg rebranded Facebook to Meta last year, signalling his goal to build a metaverse platform.

To be sure, even though Bitcoin remains the largest crypto asset by market capitalization, its price had dropped to as low as $16,000 after the FTX collapse. Bitcoin had crossed $60,000 in the first half of the year.

The CoinSwitch report further shows that investors in the age group of 18-25 years, which includes GenZ population, accounted for the highest (45%) crypto investments, while 34% of the investors were millennials in the age group of 26-35. Women accounted for only 8% of the total crypto investors in India. Though the share of women investors is low, it is growing, as per CoinSwitch.

Further, the region-wise breakup of the investments shows that the highest adoption in terms of value was seen in Delhi, followed by Bengaluru, Hyderabad, and Mumbai.  In tier 2 cities, Jaipur, Lucknow, and Pune were top adopters.

“2022 has had its share of economic, geopolitical, and market difficulties. It is important to understand how India’s investors responded to the changed circumstances,” said Ashish Singhal, CEO of CoinSwitch, on the release of the report.

Early this week, another Indian exchange WazirX, said in its year-end report that cryptos worth $10 billion were traded on its platform between January and November 2022. WazirX also added 2.1 million new users, despite seeing a decline in trade volume due to a 30% tax on virtual digital assets in India.