Mumbai, July 15, 2026, 13:53 (IST)
Crypto turnover in India is now close to $5 billion a day, up from what analysts say was about $2.1 billion in Indian digital asset holdings at the end of May. The difference suggests much of the activity is coming from brisk futures trading, not new investment, as traders look for a lighter tax hit than they get with spot transactions.
Derivatives like futures now make up at least 80% of trading on domestic exchanges, Moneycontrol reported. By those numbers, daily derivatives notional is around $4 billion, with individuals behind about 70% of futures trades. That puts retail-linked turnover roughly at $2.8 billion. Notional means the contract’s face value, not the money put up for the trade. That’s turnover, not capital.
| Comparison | Approximate value | Multiple of estimated holdings |
|---|---|---|
| Indian crypto holdings at end-May | $2.1 billion | 1.0 times |
| Estimated daily trades in India | $5.0 billion | 2.4 times |
| Derivatives trading (80% share) | $4.0 billion | 1.9 times |
| Retail share of derivatives (70%) | $2.8 billion | 1.3 times |
The comparison uses Moneycontrol’s industry estimates and tax department data seen by Reuters. Methods and timing are different, so these ratios are just indicative and not formal market stats.
The actual cash behind that turnover might be much less. A single $2.8 billion retail-notional cycle only needs $560 million collateral at 5x leverage, $140 million at 20x, or $28 million at 100x — the high end seen at some smaller venues. Traders can open and close positions over and over, so these numbers show how the mechanics work, not actual customer deposits.
Bitcoin was at $64,546 at 13:53 IST, up about 3.3% from its last close, after swinging 4.3% from high to low. A 5% move with 20x leverage can wipe out the initial margin before fees or maintenance are included. A TradingView education post out earlier Wednesday said constant trading can drive fear and force liquidations but didn’t have India-specific loss numbers.
The tax wedge stayed after the Income-tax Act, 2025 kicked in on April 1. Section 194 puts a 30% rate on income from virtual digital asset transfers and does not allow loss set-offs. Section 393 calls for a 1% tax deducted at source on the transfer amount. Both rules step in for the old Sections 115BBH and 194S, but leave the main economics for spot traders mostly the same.
Spot traders see the 1% deduction hit cash flow right away. Trading ₹100,000 over 50 cycles means ₹5 million in gross sales and triggers ₹50,000 in TDS, even if profits are zero. Traders can ask for credit after the money goes to the government, but their trading funds drop first.
| Cumulative spot-sale turnover | Gross consideration | TDS withheld at 1% | TDS as share of ₹100,000 capital |
|---|---|---|---|
| 1 time | ₹100,000 | ₹1,000 | 1% |
| 10 times | ₹1 million | ₹10,000 | 10% |
| 50 times | ₹5 million | ₹50,000 | 50% |
The math assumes the capital base gets topped up as needed and doesn’t count fees, transaction minimums or when tax credits come in.
Giottus said a typical futures trader does more than 50 trades a month, which may explain the shift. In February, Central Board of Direct Taxes Chairman Ravi Agrawal told Reuters that crypto derivatives weren’t taxed at that time and said the products needed more study, with the government planning to “tread carefully.” Right now, many advisers label profits from cash-settled futures as business income. But Moneycontrol pointed out that’s just an interpretation, not settled tax law. Moneycontrol
The cost is hitting participant outcomes. Moneycontrol, citing unnamed internal data, said 70% to 80% of derivatives traders are in the red, with individuals making up about 70% of the trades. The numbers were sourced anonymously, with no methodology detailed, so they’re still early figures. “There is a case for a calibrated regulatory framework for crypto futures,” said Moin Ladha, partner at Khaitan & Co. Moneycontrol
Policy risk is up again, but exchanges say they’re seeing a wider range of trading. Reuters said last week the Reserve Bank of India stuck by its policy leaning toward prohibition, and the tax office called offshore crypto trading tough to monitor. Mudrex business head Prateek Gupta said tokenised real-world assets made up “nearly 15 percent” of the company’s total spot and futures turnover and could go up to “20-25 percent over the next few quarters.” Mudrex did not share a leverage breakdown for those trades. Reuters
The 2.4-times ratio isn’t fixed—it can shift even if there’s no fresh investor cash. That $5 billion number is just an industry guess. Turnover might just reflect the same cash moving through, offshore wallets aren’t always in holdings, and volume gets counted differently by each exchange. Any move like a tax cut on spot trades, a cap on leverage, or tighter regulation could push things around fast. Without clear data from exchanges on margin, open interest, and liquidations, India’s futures surge doesn’t say much about real market depth.
