CoinEdition connected with Mudrex Head of Spot Gaurav Singh to understand whether rising institutional and high-net-worth participation can drive India’s next phase of crypto growth, even as regulatory uncertainty and tax pressures continue to shape the market.
India’s crypto market is entering a new phase. Retail traders built the market’s early volume, but a different kind of buyer is now showing up: institutions and high-net-worth individuals (HNIs).
According to Gaurav Singh, Head of Spot at crypto exchange Mudrex, this shift is quietly building confidence in digital assets across the country even as regulatory uncertainty and a tough tax regime continue to hold back faster growth.
“Growing participation from institutions and larger investors is increasing confidence in the asset class,” Singh said.
The statement points to a bigger change in how crypto is perceived in India. When institutions and wealthy investors commit capital, it means that crypto assets are being treated less like a speculative bet and more like a legitimate part of a portfolio.
HNI Interest Is Rising Fast
Singh sees the clearest momentum among India’s wealthier investors. “Interest is increasing rapidly as wealthier investors become more comfortable with digital assets,” he said.
Family offices and HNIs, who typically move only after doing extensive due diligence, are now allocating more attention and capital to crypto.
This matters because HNI and family-office money behaves differently from retail flows. It tends to be longer-term, less reactive to short-term price swings, and more focused on portfolio diversification than quick gains.
Singh’s view suggests crypto is starting to earn a place alongside more traditional asset classes for India’s wealthiest investors, rather than being viewed purely as a trading instrument.
The Regulatory Overhang
Despite this interest, Singh said regulation remains the single biggest obstacle. He said, “Unclear regulations are making investors and institutions hesitant to participate more actively,”.
India still has no dedicated crypto law. Digital assets aren’t recognised as legal tender by the Reserve Bank of India, yet they are taxed as Virtual Digital Assets (VDAs) under the Finance Act, 2022. That gap, taxed but not formally regulated, leaves institutions in a difficult position.
Compliance teams at banks, funds, and family offices generally need regulatory clarity before they can commit meaningfully to a new asset class, and India hasn’t yet provided that clarity.
Taxes and TDS Are Still a Drag
Alongside regulatory ambiguity, India’s tax treatment of crypto continues to shape investor behaviour. Under Section 115BBH, profits from transferring VDAs are taxed at a flat 30%, with no distinction for short- or long-term holding, plus a 4% cess.
A 1% tax deducted at source (TDS) under Section 194S applies to crypto transfers above a threshold, and crypto losses cannot be offset against other income or even against gains from other crypto trades.
In February 2026, the government confirmed it would keep this framework unchanged for the 2026–27 fiscal year, alongside tighter penalties for reporting errors.
Singh’s response tracks with what that framework does to trading behaviour, “Higher taxes and TDS are discouraging some investors from actively trading or increasing their exposure.”
He added that the single biggest catalyst for institutional adoption would be a change to this tax structure: “Changes to the current tax framework would make crypto more competitive with traditional investment assets.”
Notably, Singh isn’t arguing that taxes are killing demand outright, as interest, by his own account, is still growing.
The tax framework is better understood as friction: it dampens trading frequency and volume without necessarily stopping investors from holding crypto altogether.
Tokenization as the Next Growth Lever
Meanwhile, where Singh is most optimistic is tokenized real-world assets (RWAs), the practice of representing traditional assets like bonds, real estate, or funds as blockchain-based tokens.
“Tokenised real-world assets could connect traditional Indian financial markets with blockchain infrastructure,” he said.
To him, RWA is the segment with the strongest opportunity in India over the next few years. He added, “Tokenisation could bring blockchain technology deeper into India’s existing financial infrastructure.”
Notably, tokenisation doesn’t require India to build an entirely new asset class from scratch. It simply lets blockchain plug into markets like bonds and real estate that already exist and are regulated. For a market still waiting on comprehensive crypto legislation, that’s a meaningfully lower barrier to institutional entry.
Market That Diversifies, Not Replaces
Asked how Indian investors may change over the next two to three years, Singh expects more diversification rather than a move away from traditional assets.
“Investors will increasingly diversify across Bitcoin, stablecoins, tokenised assets and other digital-asset categories,” he said.
The key point is that new investors and assets are adding to the market, not replacing retail investors or activity. Retail investors helped build the market, and now HNIs, family offices and institutions are joining them.
Singh also highlighted a major opportunity for global crypto firms: India’s growing number of HNIs, family offices and wealthy investors interested in digital assets, a group many international platforms have yet to fully target.
In Essence
Singh’s overall view is cautiously optimistic. He believes India is moving toward wider crypto adoption as more investors and institutions show interest.
His comments suggest the market is at an important turning point. Institutional interest is growing, HNIs are becoming more active, and tokenisation could help connect crypto with India’s existing financial system.
However, two major problems remain: unclear regulations and high taxes. India’s crypto market already has strong investor interest. Its future growth may depend more on whether policymakers create clearer rules and a fairer tax system.
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