The Indonesian cryptocurrency market has experienced a transformative year, with transactions from January to October 2024 reaching IDR 475.13 trillion (approximately $30 billion).
According to a local media article from November 28, 2024this is a staggering 352.89% increase compared to the same period in 2023.
THE the rise in crypto activity also exceeded the 2022 and 2023 transaction volumes, which reached IDR 306.4 trillion (approximately $19.4 billion) and IDR 149.3 trillion (approximately $6.5 billion), respectively , according to data published by the Commodity Futures Trading Supervisory Agency (Bappebti).
However, while impressive, the 2024 numbers still fall short of the $54 billion peak seen in 2021 during the crypto market’s bull cycle.
Crypto transactions in Indonesia grew over 350% in a year, reaching $30 billion via @BitcoinWorldN #BTC #cryptocurrency #Latest updates
– Bitcoin World News (@BitcoinWorldN) November 29, 2024
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Growing Appetite and Favorable Conditions for Crypto Growth in Indonesia
This growth reflects Indonesians’ increased interest in cryptocurrency trading.
As of October 2024, there were 21.63 million registered clients reported in the industry, with 716,000 active traders using seven licensed physical crypto asset (PFAK) traders, Bappebti reported.
“This proves that trading crypto assets is one of the trading options demanded by the public,” Kasan, the head of Bappebti, said in a press release. It would appear that the popularity of assets such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Solana (SOL), and Pepe (PEPE) are driving much of this interest.
Notably, 60% of crypto investors in Indonesia belong to the age group of 18 to 30 years old. This indicates high adoption among the younger generation in the country.
This demographic is attracted to the financial opportunities and innovative technologies that underpin blockchain assets, aligning Indonesia with other high-adoption countries like India and Nigeria, according to the Global Index. adoption of Chainalysis cryptography.
In October 2024, the crypto market benefited from positive macroeconomic trends, including a cut in interest rates from the US Federal Reserve and economic easing measures taken by China. These factors have created stability and optimism, increasing capital flows into stablecoins and liquidity for major assets like Bitcoin.
“October is an important month for the crypto market, not only in Indonesia but also globally,” noted Wan Iqbal, marketing director of Tokocrypto, adding that Bitcoin reached an all-time high of $99,551 (approximately 1. 58 billion IDR) on November 22, supported by Bitcoin ETF and significant institutional inflows.
Local market growth also aligns with broader regulatory efforts. The Indonesian Financial Services Authority (OJK) is expected to assume supervision of the crypto industry in January 2025, placing it under the same regulatory framework as traditional financial instruments.
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What the growing trends indicate
The exponential growth in transaction volume highlights Indonesians’ growing confidence and familiarity with digital assets. A 352% year-over-year increase suggests that retail and institutional players are becoming more active in the market.
According to Chainalysis, the country is ranked third globally and first in the region, while enjoying the highest year-over-year adoption growth of nearly 200%.
Notably, Indonesia also leads the world in retail DeFi value received, highlighting Indonesia’s adoption of digital payment. Meanwhile, national interest in cryptocurrencies is growing rapidly, with 9.9 million users in 2021 to 28.52 million in 2024. With a population of over 280 million, the growth prospects future potential are considerable.
With a significant share of investors under the age of 30, the market is driven by younger, tech-savvy individuals. This demographic will likely continue to fuel growth as digital literacy and accessibility improve.
The move to OJK oversight in 2025 and increased tax revenue indicates that the government views crypto as a legitimate financial sector. This regulatory certainty is expected to attract more investors and operators, thereby promoting long-term market stability.
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Crypto Tax Revenue and Economic Potential
The government’s growing interest in cryptocurrencies is evident in its revenue collection. Crypto transaction taxes between 2022 and October 2024 reached IDR 942.88 billion ($59.4 million), demonstrating the sector’s contribution to the economy.
Bappebti highlights that the growing number of transactions and customers could further optimize state revenue, strengthening Indonesia’s position as a leading crypto market.
Cryptocurrency tax revenues consist of $28 million in Income Tax Section 22 (PPh 22) revenues from cryptocurrency sales transactions on exchanges and $31 million in revenues from VAT DN for cryptocurrency purchase transactions on exchanges.
“Increasing the number of customers and crypto asset transactions will maximize state revenue while strengthening Indonesia’s position as one of the largest crypto markets in the world,” Kasan added.
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