Crypto in India: Path to Financial Freedom or a Burden

Cryptocurrency has become one of the most widely debated financial assets in recent years, attracting interest from all across the world. The worldwide cryptocurrency market has crossed $4 trillion, and Bitcoin reached an all-time high of over $124,000 on 14 August, 2025, and Ethereum is trading close to its record high, which adds to the excitement in 2025. In India, the conversation is shifting too.

Despite regulatory uncertainty, more young investors are stepping in. For many in Gen Z, Crypto is either a path toward financial freedom or simply a space to explore and experiment. Nevertheless, as interest increases, concerns grow as well. Digital assets are gaining some acceptance, yet the fundamental question remains whether Crypto is a reliable path to wealth building or simply a risky bet.

The Rise of Crypto in India

Crypto has seen a rollercoaster journey in India. Back in 2018, the Reserve Bank of India restricted banks and financial institutions from dealing with crypto-related businesses. While this wasn't a direct ban on individuals trading Crypto, it pushed the industry into a corner. Then, in 2020, the Supreme Court struck down this RBI directive, giving crypto companies the breathing room to operate again.

Since then, things have changed quickly. Cryptocurrencies are still not officially recognised as legal tender in India, but they are also not illegal, placing them in a sort of grey area. That hasn't stopped people from jumping in.

Even without regulations, India is among the countries with the highest rates of cryptocurrency adoption worldwide. Chainalysis reported that India ranked first in cryptocurrency adoption in both 2023 and 2024. That demonstrates that things are progressing at fast pace.

According to India's Web3 Landscape 2024 by Hashed Emergent, the country accounts for 11.8 per cent of global crypto developers and 5.4 per cent of Web3 founders. In 2024 alone, India contributed 17 per cent of all new developers entering the space.

According to CoinSwitch's Crypto Portfolio report for Q2 2025, Bengaluru, Mumbai, and Delhi accounted for 26.60 per cent of total cryptocurrency investments in India. Delhi has a total of 14.60 per cent, Bengaluru 6.80 per cent, and Mumbai 5.20 per cent. Kolkata tops the list in profitability, with 75.61 per cent of its investors seeing gains. Smaller cities such as Jaipur, Lucknow and Patna are also making their mark, showing that crypto adoption is expanding well beyond the major metros.

The report also shows that India's crypto investors are predominantly young. About 71.70 percent are less than 35 years old and out of these 44.40 per cent are between 26 and 35 years old, while 27.30 per cent are between 18 and 25 years old. Women increases upto 12.02 per cent of the total investors that shows a slow and steady uptick in diversity of investors in India's digital asset ecosystem.

Gen Z's Growing Presence in the Crypto Space

India's Gen Z is on track to establish itself quickly as a dynamic force in the country's rapidly growing crypto landscape. With an eye on financial independence, a strong interest in new technologies, and the frenzy surrounding digital assets, young Indians are actively exploring the crypto space.

Mridul Gupta, Founding Partner at CoinDCX, said young Indians, especially those in their 20s and early 30s, are embracing Crypto as a tech-led path to wealth beyond mere speculation. The platform's average user age is now close to 30, with a 30 per cent rise in trading volume in H1 2025 compared to H1 2024. Users increasingly prefer blue-chip tokens like Bitcoin over meme coins, and Gen Z is actively contributing, with India now leading in Web3 developer talent.

While a growing number of young Indians view Crypto as a gateway to financial freedom, their perspectives are still sharply divided.

Karan Kumar, 23, a chartered accountancy student, started investing in 2021. Attracted by the mix of high risk and the possibility of high returns, he began investing in Bitcoin before diversifying into various altcoins through multiple platforms such as Binance, CoinDCX, CoinSwitch and Bybit.

"I see it as a long-term asset, not just a way to get rich quick," he says.

He believes Crypto can lead to financial freedom, having seen "unbelievable gains" over the past four years. Karan follows crypto-related information and trends through X (formerly Twitter) and YouTube. While not his primary income source, Crypto serves as a passive income stream. Still, he cautions: "It's a highly volatile space, prices fluctuate often, and without proper research, people can lose money too."

On the other hand, 21-year-old Ishita Rawat, a junior analyst at RMSI, prefers to tread carefully. Despite all the buzz around cryptocurrency, she's never really felt the urge to invest. For her, the uncertainty over regulations and a limited understanding of the space are reasons to hold back.

"Crypto feels like a high-risk area to me," she says. "I do not fully understand it, and without a clear legal framework in India, it does not seem secure enough to invest in."

For Ishita, financial freedom means being able to buy essentials and indulge personal wants without hesitation. While she would never rule out Crypto altogether, she says it would require the right educational material and official endorsement before she would even consider making it part of her financial journey.

Can Crypto Lead to Financial Freedom or is it a Burden

Some young investors, like Karan, believe that cryptocurrency has the potential to create long-term wealth, whereas others, like Ishita, doubt its long-term prospects. Industry experts note that the reality is more complicated than it seems. The dream of financial freedom exists, but it's depends on education, access, and the appropriate legal framework.

Vedang Vatsa, the founder of Hashtag Web3 feels that while cryptocurrency may provide a path to financial independence for some, it is not viable for everyone. "While a few individuals have used it to build wealth or access global financial tools, outcomes vary widely," he says.

He also highlights that in countries like Turkey and Sri Lanka, people turned to Crypto as a way to preserve value during currency devaluation. "If economic conditions change in India, similar use cases may emerge," Vedang notes, adding that Crypto's future role in personal finance will depend on individual choices, financial education, and how policies evolve.

While Vedang Vatsa highlights the conditional nature of Crypto's role in financial freedom, Edul Patel, Co-founder and CEO of Mudrex, points to how user behaviour has already evolved in recent years.

"In the last few years, investor behaviour has changed significantly," he says. "While many still trade like they would in the stock market, long-term investing and holding crypto as part of a portfolio has definitely gone up."

Edul Patel adds that Crypto is now seen as an emerging asset class, blending elements of currency, commodity, and security. As regulators continue to find a path between innovation and investor protection, the developing framework may eventually establish Crypto as a more reliable tool in the journey toward financial independence.

Even as interest develops, significant challenges remain. With high taxes and confusing rules governing speculative trading patterns, embracing cryptocurrencies for financial freedom in India is a long way off.

Given these challenges, Monica Jasuja, Chief Expansion and Innovation Officer at Emerging Payments Association Asia, remains doubtful about Crypto's future in India right now.

She says, "Achieving financial independence through Crypto in India remains more of an aspiration than a reality, citing the flat 30 per cent tax on gains, the 1 per cent TDS on transfers over Rs 10,000, and the prohibition on setting off losses. Financial freedom requires sustainable returns, not the quick-flip mentality dominating our markets today."

Building on these concerns, Mridul Gupta of CoinDCX notes that the combined impact of high taxes and unclear regulations is already taking a toll. Caution is necessary, but without structured regulation, it is ineffective at best and counterproductive at worst.

He said, "Due to the lack of clear regulation and high taxes, we've seen a substantial decline in trading volumes since the taxation provisions came into effect. This is pushing users and builders away from Indian platforms to offshore or P2P alternatives, fragmenting the ecosystem and weakening the tax net." He also pointed out that such platforms often expose users to greater risks, as seen in many cases.

The Way Forward

As experts have mentioned, unclear regulation and a high tax burden have gradually driven users toward riskier, unregulated platforms, while undermining the formal ecosystem. Beyond policy shortcomings, Crypto is still vulnerable to scams given its inherently decentralised and often anonymous nature. Crypto in India has the potential to be either a pathway to financial freedom or a liability for users and this will be determined by user behaviour and future policy decisions. There is significant potential if adequate awareness, due diligence and financial literacy are implemented. If not, Crypto has the potential to do more damage than good.