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Shiba Inu in India is losing its dominance ever since the tax regulations are rolled out.
After the major cryptos like Bitcoin and ETH, meme coins have gained enormous popularity in the decentralized era, Indians too got on to the bandwagon of the crypto market to become ardent minters of cryptocurrencies such as Dogecoin and Shiba Inu. Shiba Inu though started as a joke, its growth over a short span of time has impressed many Indian cryptocurrency investors, giving it an edge even in the Indian crypto market. However, with the recent tax regulation putting a break to its growth run, Shiba Inu in India is on a downward spiral.
Dogecoin, launched as a doggy coin in 2013, based on a famous dog meme of the time, maintaining a low profile till 2020. Only after it gained prominence, did other meme coins emerge into the crypto arena. One among them was Shiba Inu, which became famous in late 2020. Especially, Shiba Inu in India gained a huge following in a short span, reaching its high in October. However, with the new tax rules, it seems, SHIB is gradually losing its dominance.
When Indian authorities announced that cryptocurrency gains will be taxed at 30%, Indian investors still seemed hopeful. But the announcement of the offset clause came as a big shock to the Indian investors. With the majority of cryptocurrencies not doing well, investors feel it is unreasonable to pay tax for the minimum gains. Even crypto experts are on the same page, suggesting investors withdraw their Shiba Inu investments as early as possible.
Shiba Inu’s Growth in India
Surprisingly, during festival seasons, Shiba Inu’s investment in India took a major turn. Similar to Indians’ investment in gold and other valuables, last year, they bought SHIB tokens. At the time of Diwali 2021, the Dogecoin competitor was positioned at the seventh position in the cryptocurrency market. Remarkably, Shiba Inu was experiencing a massive bull run at the time owing to the Change.org petition and FOMO.
At the time when Shiba Inu was going to the moon, it took many early investors with it. Even people who bought US$8,000 SHIB tokens happen to bang on US$5.7 billion in mid-October. Several others who held the Dogecoin killer profited massively from their investments. Besides, it Dogecoin vs Shiba Inu fight in 2021 gave a major boost to both cryptocurrencies.
The Spell of Taxation
Although Shiba Inu gained popularity in a short span of time, it managed to stay in investors’ wallets for the long term. Even when Shiba Inu and Dogecoin lost their position in the top 10 cryptocurrency list, Indian investors still held on to the token. Owing to its extreme volatility, investors believed that SHIB could give another boost to their investment portfolio.
Unfortunately, their dreams got shattered when the Indian government proposed to treat cryptocurrencies as financial assets while safeguarding small investors. When regulation on cryptocurrency taxation was finalized in February this year, Shiba Inu slowly started losing its ground. A couple of days before, the finance ministry has further clarified that India won’t allow offsetting loss on one crypto with profit from another. This came as a big blog to SHIB investors. With the Dogecoin competitor already losing value, compensating its fall with the gains from other cryptos was a good option. But since that too is unavailable, experts say that the investment in SHIB will fall drastically.
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