Beyond gold: What $340 billion in crypto flows says about India's investment preferences this Dhanteras

This Dhanteras, Indian households will do what they have done for generations: buy gold. The tradition remains deeply rooted in the country's investment culture, with gold continuing to represent wealth preservation, financial security and prosperity. What has changed, however, is how much that tradition costs, how people choose to own gold, and what other investment avenues are beginning to compete for a share of household savings.

The numbers this year offer an interesting perspective on that shift.

The gold numbers deserve a careful read. India's gold demand fell 29% year-on-year to 162.5 tonnes in the July–September quarter, according to the World Gold Council. Yet the value of that demand rose 3% to Rs 2,419 billion, because domestic prices averaged Rs 148,891 per 10 grams, up 45% from a year earlier.


In other words, Indians bought considerably less gold by volume but continued to spend more on it. The appetite for gold has not disappeared; affordability is increasingly influencing how much households purchase.

Also Read | Dhanteras 2026: Buying gold today? Here's how to choose between jewellery, coins, ETFs and SGBs

Indian gold ETF inflows reached 28.8 tonnes in the first nine months of 2026, up 47% year-on-year, while gross digital gold purchases increased 76% to 16.3 tonnes. In contrast, bar and coin demand fell 40% during the third quarter.

This divergence points towards a gradual change in ownership preferences. Investors still want exposure to gold, but an increasing number are choosing financial and digital formats over physical holdings. Convenience, accessibility, liquidity and the ability to invest smaller amounts are becoming important considerations alongside the traditional appeal of owning the metal.

This is where crypto enters the conversation, and where headline figures need care.

Chainalysis estimated that India received approximately $338 billion in on-chain crypto value in the 12 months to June 2025, the highest in the Asia-Pacific region and a 99% increase from the previous year. At first glance, this figure may suggest that $340 billion in fresh investment has entered India's crypto market. That interpretation, however, would be misleading.

On-chain value represents gross transaction flows, not the amount of new capital invested or the total wealth held by Indian crypto investors. The same capital can move between wallets, exchanges and platforms multiple times, contributing to the overall transaction volume.

Therefore, while the figure demonstrates the scale of crypto-related activity in India, it cannot be directly compared with household gold purchases or interpreted as savings moving away from traditional assets.

It is also not the latest picture. Chainalysis's 2026 data, covering July 2025 to June 2026, shows India's crypto economy contracting 14.7% to about $135 billion during the global downturn, with $88.4 billion in centralised exchange inflows. India moved from first in the 2025 Global Crypto Adoption Index to sixth in 2026. The two years appear to use different measures, so they should not be read as a straight fall from $338 billion.

What does the evidence support? It covers two main things:

First, the shift is towards digital ownership, not from gold to crypto. A household that buys a coin on Dhanteras may also hold a gold ETF, digital gold and, sometimes, a small crypto position. These investment choices do not have to compete with one another. They can serve different purposes within the same portfolio. Gold has an established history as a store of value in rupee terms, while crypto assets remain significantly more volatile and have not demonstrated comparable resilience across Indian economic cycles. The more relevant development is that investors are becoming comfortable accessing different asset classes through digital platforms. The underlying preference for diversification and wealth preservation remains, but the channels through which people participate in financial markets are changing.

Second, participation is maturing. Chainalysis describes India's market as largely investment-driven, with the investor base broadening to people aged 35 and above. That matters more than any headline volume, because it suggests some investors treat crypto as one part of a portfolio rather than a short-term trade.

For anyone weighing gold against crypto this festive season, the honest answer is that they serve different purposes and carry very different risks. Neither is a guaranteed hedge, past returns say little about future ones, and their tax treatment differs materially. Suitability depends on individual goals, time horizon, and the ability to absorb losses.

The larger story is not about replacing gold. It is Indian savers moving from physical to digital ownership, from a single store of value to several. Clear, consistent rules, including for virtual digital assets, will decide how much of that shift happens within India's financial system rather than outside it.

(Prateek Gupta is a Head of Business at Mudrex)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)