Indian Investors Turn to US Bitcoin ETFs Despite Regulatory Warnings
The introduction of US spot Bitcoin ETFs in January garnered significant attention, attracting institutional investors with total inflows surpassing $12.3 billion to date.
Notably, a notable portion of these investors hails from India, utilizing the remittance quota to access Bitcoin ETFs despite warnings from the country’s central bank regarding cryptocurrency investments.
Indian investors, seeking exposure to Bitcoin ETFs, are leveraging the Reserve Bank of India’s Liberalised Remittance Scheme, which allows citizens to remit up to $250,000 annually. Platforms like Vested Finance, facilitating investments in overseas securities for Indian investors, have witnessed strong demand for Bitcoin ETFs, with trading volumes reaching $5.3 million, primarily driven by buy orders.
Viram Shah, CEO of Vested, highlighted that approximately 70% of ETF traders in India are affluent individuals with high net worth, enticed by tax incentives provided through the Liberalised Remittance Scheme.
Despite India’s stringent taxation regime for cryptocurrencies, including a flat 30% tax on crypto profits and 1% TDS on trading, investors have sought alternatives like overseas platforms, exacerbating challenges for local crypto businesses.
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Buying Bitcoin ETFs through the Liberalised Remittance Scheme offers a more cost-effective option, potentially reducing taxation to below 20% on capital gains compared to the higher tax rates applicable through domestic crypto platforms.
Mudrex, a crypto asset management platform, has partnered with Vested to offer Bitcoin ETFs to clients, particularly appealing to Indian family offices seeking tax-compliant investment options. This trend persists despite warnings from the Reserve Bank of India, emphasizing the continued interest in cryptocurrencies among Indian investors.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
