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Sumit Gupta’s tryst with cryptocurrencies started in 2014 as a dealer. This was the time when bitcoin, the preferred cryptocurrency, had its first run up with its value growing practically 18-fold in a yr and subsequently, investor’s frenzy round cryptocurrencies peaked.
When Gupta operated throughout a number of exchanges globally to commerce within the digital tokens, he was confronted with many urgent points ailing the ecosystem: lack of liquidity out there, large unfold and gradual order execution.
This prompted Gupta to reconnect together with his buddy from IIT-Bombay, Neeraj Khandelwal, who was additionally actively buying and selling in cryptocurrencies at the moment, to brainstorm on a product that would bridge these key market gaps for cryptocurrency merchants and traders in India.
This led to the genesis of CoinDCX in March 2018.
“By way of CoinDCX, we needed to supply its merchants a chance to commerce inexhaustible and with out restrict with a strong order e book,” says co-founder and CEO Gupta. “We introduced highest liquidity into the Indian market by introducing the world’s high cryptocurrency exchanges like Binance, Huobi International and HitBTC within the nation.”
Earlier than establishing CoinDCX, Gupta had additionally co-founded ListUp, an auction-based value discovery platform for second-hand electronics.
Journey up to now
CoinDCX began as a lite cryptocurrency change to deal with the core challenge of lack of liquidity out there. “We began off as a crypto-to-crypto (C2C) change, providing a market the place patrons and sellers might come collectively to change cryptocurrencies,” says Gupta.
The corporate succeeded in resolving the difficulty of liquidity to a big extent by bringing high world exchanges beneath one fold in India.
Taking a step ahead, the corporate additionally launched fiat-to-cryptocurrency function referred to as Insta in the identical yr, which helped customers to purchase cryptocurrency in fiat. Through the years, the corporate has consistently innovated and constructed a various suite of crypto-based monetary services and products.
To call just a few, customers can lend their crypto property and earn as much as 12 per cent curiosity by way of the platform’s Lend function. One other function referred to as Stake lets customers earn passive revenue by holding their cryptocurrency and margin presents customers six occasions leverage trades on over 250 cash.
“Whereas designing our merchandise, we have in mind the assorted sorts of merchants working in our area, their buying and selling experiences, their capacity for danger tolerance and the frequency of their buying and selling,” says Gupta.
In beneath three years, CoinDCX claims to be India’s largest cryptocurrency change when it comes to quantity, liquidity and by bringing all crypto-trading merchandise beneath a single roof. The corporate claims to course of day by day buying and selling quantity of about $15 million and has a consumer base of over 200,000 traders and merchants.
Constructing an organization amidst hostile laws
The Reserve Financial institution of India (RBI) and the federal government have been skeptical in regards to the digital tokens for the reason that starting. In an excessive transfer, in April 2018 the central financial institution had barred all banks and monetary establishments regulated beneath it from dealing in transactions associated to cryptocurrencies.
It was a turbulent time for CoinDCX because the directive got here only one month after the corporate began operations. “It was doubly laborious for us and different exchanges that had been working for some time as we needed to both scale down their operations or needed to decide for a whole shutdown,” says Gupta.
Furthermore, because the ban attributed a damaging connotation to the trade, not solely did small traders shied away from investing within the digital token, it turned tough to even get the traders to commit within the absence of a transparent regulation. “Whereas most traders realized India’s potential owing to its excessive cellular penetration price and extremely gifted tech workforce, traders didn’t need to transfer into a rustic the place there was an outright ban,” recollects Gupta.
However, the corporate held floor and continued constructing CoinDCX to make sure that their customers and stakeholders noticed the worth in what they had been doing and needed to realize, provides Gupta.
The truth is, one yr after the corporate launched its operations, CoinDCX raised seed funding from Sanjay Mehta (founder and accomplice at 100x.VC) and Utsav Somani (accomplice at AngelList India) and worldwide investor Bain Capital Ventures.
In March 2020, the Supreme Court docket struck down RBI’s order, which was a serious turnaround level for CoinDCX. “The choice supplied a morale increase to the cryptocurrency group in India and resulted in lots of optimistic developments within the nation’s cryptocurrency ecosystem,” says Gupta.
Through the COVID-19 induced lockdown, the corporate claims to have grown exponentially. Within the April-June quarter, the change clocked thrice progress within the general quantity traded and 4 occasions quarter-over-quarter progress in day by day energetic customers. Total, in Q2 and Q3, CoinDCX noticed 12 per cent enhance in signups and 20 per cent enhance in quantity. Additional, it recorded 21 per cent month on month (m-o-m) progress in commerce quantity and 25 per cent m-o-m progress within the variety of customers, in October when the present rally in bitcoin value took off.
The corporate has additionally raised a complete of $19.4 million in exterior funding throughout three rounds in 2020. “We have now additionally tripled our workforce from 30 in March to 90 in December,” says Gupta, detailing the corporate’s progress within the pandemic yr.
On being requested how tough it has been to construct a enterprise in an area with hostile laws, Gupta says operating a crypto-related enterprise is a problem not solely in India however globally. “I feel regulatory insurance policies, lack of expertise and readability about taxation-related points are the most important challenges for anybody working on this area wherever on the planet.”