Indonesian Cryptocurrency Transactions Surge to $30B in 2024, Marking Strong Recovery

Indonesia’s cryptocurrency market has experienced a significant rebound in 2024, surpassing $30 billion in transactions from January to October—a 350% increase compared to the same period in 2023. This marks the highest transaction volume since the peak of the 2021 bull market, although it remains well below the country’s 2021 highs.

According to data from Indonesia's Commodity Futures Trading Supervisory Agency (CoFTRA), cryptocurrency transactions totaled approximately $6.5 billion in 2023, a notable drop from the $19.4 billion recorded in 2022. Despite this decline, the 2024 figures signal a strong recovery and suggest that the market is on track to exceed the transaction volumes of both the previous two years combined.

The Recovery After 2021

Indonesia’s cryptocurrency market had experienced a dramatic downturn after its 2021 peak, where transactions reached an estimated $54 billion. This sharp decline was largely attributed to the government’s introduction of a "dual taxation" policy in 2022, which imposed an additional 0.1% tax on crypto gains, on top of the standard capital gains taxes. While the tax policy dampened market activity in the short term, the recent surge in transaction volume indicates that the market is bouncing back.

Growing Market Adoption in Southeast Asia

Indonesia, along with the broader Oceania/Asia region, continues to lead global cryptocurrency adoption. According to Chainalysis’ Global Cryptocurrency Adoption index, seven of the top ten countries by crypto adoption are located in this region, with Indonesia ranking just behind India and Nigeria.

One significant factor behind Indonesia’s booming crypto market is its younger population. Over 60% of cryptocurrency investors in Indonesia are under the age of 30, contributing to the higher adoption rates in the country compared to Europe and the United States, where crypto adoption trends are skewed toward older age groups. This youthful demographic plays a critical role in driving the nation’s cryptocurrency growth, in line with broader regional trends that favor younger investors.

Policy Shifts Fuel Market Momentum

Recent policy changes have also played a pivotal role in revitalizing Indonesia's cryptocurrency market. In particular, the government’s decision to ease restrictions on institutional investment through CoFTRA Regulation (PerBa) Number 9 of 2024 may have contributed to the surge seen in September 2024. This regulatory shift has attracted renewed interest from institutional investors, further bolstering market confidence.

However, insiders continue to urge the government to reconsider the "double tax" policy, which many believe still dampens market activity. With President Prabowo Subianto’s new administration taking office in October, there are growing expectations for further policy revisions, which could shape the future of cryptocurrency regulation in the country.

Looking Ahead

As Indonesia continues to recover from the challenges of 2022, the nation’s cryptocurrency market appears poised for further growth. With a combination of favorable demographics, positive policy changes, and increasing institutional involvement, Indonesia remains one of the top countries driving global crypto adoption. While the market is still below its 2021 highs, the impressive recovery seen in 2024 suggests that the country's crypto landscape is set for a promising future.