The Bitcoin rally of the last six months has stoked tremendous interest in virtual currencies in India but there’s a small problem. The soaring price — 1 BTC = $4,135 at last count — makes it hugely expensive for an Indian investor to enter the world’s flagship virtual currency, not to mention worries of whether Bitcoin prices have peaked and are ready to fall.

Ask Santosh Kumar, a 24-year-old Bengaluru software consultant, who mines virtual currencies on the side seeking to make a quick and smart buck. He started trading Bitcoins in 2014 and then went on to mine the lesser-known altcoin Dogecoin, which was also an easier option to mine back then. (Altcoin is short for alternate coins.) Kumar had the intuition that the cryptocurrency market would gain popularity and it would be better to enter a market when the prices are lower.

That learning has stayed with him. Today, Kumar trades and mines several altcoins including Ether, OmiseGo, TenX, Civic, Ox and Neo. He is one among a growing group of crypto enthusiasts in India who are beginning to actively engage in altcoins.

What are altcoins? Altcoins are cryptocurrencies that came after Bitcoin: like Ether, Litecoin, Ripple, Dogecoin and such. There are over 900 cryptocurrencies traded on various exchanges. Bitcoin still accounts for over 46% of global cryptocurrency market cap — more than double the market cap of Ethereum, the second most popular cryptocurrency.

But altcoins have been sharply increasing their footprint over the past few quarters. On January 1 this year, altcoins market cap was at around $2.18 billion, which rose to $76.62 billion as of August 20, according to data from Bitcoin tracker Coin Dance. That is, a leap of more than 35 times. For the same period, Bitcoin market cap climbed to $66.48 billion from $16.28 billion — an expansion of four times. While Bitcoin’s bull run has caught all the attention, it is altcoins that are really off the chart.

India is estimated to account for nearly 11% of global Bitcoin trade. There is a corresponding rise in demand for altcoins in the Indian cryptocurrency market, triggered off by the recent bull run on Bitcoin. Numbers are hard to come by but if the three new altcoin exchanges opening up to Indian customers to buy and sell altcoins using Indian currency are any indication, altcoins are the rage.

Jumping hoops for altcoins

Altcoin prices have tracked Bitcoin. Since the beginning of 2017, the price of Ether has risen by 40x to touch $320, Litecoin has grown about 10x and is currently hovering around the $45 mark, and Dash is valued at around $290 after a 26 times price rise. This kind of appreciation has set off demand for altcoins in India and cryptocurrency exchanges are launching more altcoin options to cater to this demand.

The founder of one such soon-to-launch exchange uses Google searches as a proxy for the demand. “There are over one million searches regarding Litecoin from India on Google and similarly over 100,000 monthly searches on Ripple. These are some indicators and data points, among other factors, that showed interest from India and we used this to decide on what altcoins to offer our users in India,” Rahul Raj, co-founder of Koinex told FactorDaily.

This May, San Francisco-based blockchain startup Ripple Labs partnered with cryptocurrency exchange BTCXIndia to help users trade Ripple in Indian rupees. BuyUcoin, based in New Delhi and launched this July, permits trades in altcoins in Indian rupees. Most other exchanges have focussed primarily on Bitcoin trades, with the odd one trading in Ether.

Until these altcoin trading platforms came up, the easiest way for a user to buy an altcoin was to buy a Bitcoin from an Indian exchange like Zebpay, Coinsecure or Unocoin and then later swap it for an equivalent amount of altcoin from an international exchange; with the reverse in the case of selling. Adding to the friction were price fluctuations and variations across markets.

New bourses on the block

Koinex: Koinex’s Raj talks of how the first crop of cryptocurrency exchanges did not service the demand for altcoins in India. “Even after two years, the initial players were not able to offer the top 4-5 cryptocurrencies that were being looked for in India,” he says. “Also, most of them don’t act as an exchange and more like brokers where you sell to them and buy from them.”

Raj and his co-founders Aditya Naik and Rakesh Yadav wanted to replicate what global exchanges offered: better market access and cryptocurrency options in India. To do this they decided to get into this cryptocurrency exchange space by founding Koinex. The company plans to launch their cryptocurrency trading platform on August 25 and intends to start by offering Bitcoin, Litecoin, Ether and Ripple for users to trade. To incentivise volumes, they plan an associate program that rewards traders meeting a minimum daily sale criterion with fee rebates, priority withdrawals and deposits, and premium customer support.

Bitbay: Polish cryptocurrency exchange Bitbay is the first international entrant in this space. The exchange will begin with a handful of cryptocurrency variants and plans to add more in the coming months. “Currently, BitBay is in India with seven crypto coins that include Bitcoin, Monero, Gamecredits, Ether, Lisk, Litecoin and Dash to trade and exchange on the platform from 24 August onwards,” says Rohit Dahda, who heads Bitbay India.

The company has opened up its trading platform for users to trade with virtual money so that they can get accustomed to trading on it. According to the company, it plans to bring a total of 17 cryptocurrencies on its platform in India by the end of the year.

EZ Ether: EZ Ether is a marketplace-model Ether trading platform developed by Sumukh Shetty, Quijano Flores and Arseniy Klempner. The three came up with the idea to build an Ether trading marketplace when they met at Jaaga Study, an open learning center in Bengaluru.

Users can place sell or buy ads on the platform and once a transaction is successfully completed, EZ Ether charges the user who placed the ad 1% of the transaction value as a transaction fee. The platform launched August 7.

The platform makes use of Ethereum smart contract feature to enable trading, wherein once a trade is initiated the seller’s Ether is moved into an escrow account and only once the buyer completes the payment the money is released to his wallet. With this process, says Shetty, there is no way of cheating: “This way the seller cannot pull the money out once he receives the money and cheat the buyer and nor can the buyer cheat the seller by not paying up for the transactions.”

What next?

The new altcoins exchanges are anything but standard in how they operate. Some come with a minimum order value, some operate as marketplaces with a transaction fee, and some have a fixed buy and sell rate which is dictated by them. But in spite of all these differences, one thing is clear: the altcoin market in India is attracting more investors, which in turn has more trading platforms setting up shop. This, in turn, will help improve the price and ease for Indian users to transact in cryptocurrencies.

The story was updated at 11:00am to add links to the services.