The digital asset class and the number of crypto users are still in its formative stages at present. The Boston Consulting Group, Bitget, and Foresight Ventures collaborated to produce this research, the purpose of which was to highlight and quantify the development accomplished by this embryonic sector over the last several years.
Despite the recent market movement to the negative, the researchers placed a strong emphasis on the expansion of digital assets over the long run. When measured against 2017, the year in which Bitcoin, Ethereum, and several other significant cryptocurrencies achieved their prior all-time highs, the sector has experienced a phenomenal increase in only the last five years.
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While some have argued that this growth is unsustainable—notably Goldman Sachs Chief Executive Officer Lloyd Blankfein—the fact remains that there are now more than 2.9 million crypto users worldwide, with approximately $300 billion worth of digital assets exchanged every day.
The cryptocurrency market is growing at a rapid rate. It has been increasing by more than 100% every year since its inception in 2017. This makes it one of the fastest-growing markets in the world right now.
According to research conducted by the International Data Corporation (IDC), there were just 800 apps that were based on cryptocurrencies in 2017. However, this number has increased by a factor of more than ten and is already registered at 10,000 today. This is supported by a spike in institutional money, which now accounts for 68 percent of the entire trading volume in the cryptocurrency market.
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Compare this to 2020 which was recorded in 2018. According to the report:
The price of cryptocurrencies generates attention, which in turn generates ideas and action, which ultimately generates innovation. The surge in popularity of initial coin offerings (ICOs) in 2017 paved the way for the launch of cryptocurrency exchanges that now dominate the industry.
The surge in popularity has prompted many institutional investors to join the fray. This is evident from the fact that there has been a considerable increase in the number of hedge funds, venture capital firms, and banks that are actively buying and selling cryptocurrencies.
In 2017, approximately 75 percent of individuals holding cryptocurrencies were based in North America. In addition to this, it was found that there is a significant correlation between the level of interest shown by institutions and their geographical location. For instance, pension funds have shown more interest in investing in cryptocurrencies compared to banks or companies because they provide retirement benefits for their employees.
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It can also be seen from the research results that there exists a significant correlation between the age bracket of investors and their level of interest shown by institutions while buying cryptocurrencies: those who are younger tend to show more interest than older ones do; however this trend reverses as we move up through age brackets until we reach those who are older than 50 years old (or even 70 years old).
The number of people holding cryptocurrencies might reach one billion by the year 2030 if the emerging asset class follows a path comparable to that of the internet. To put it another way, the adoption of digital assets is about equivalent to the state of the internet in 1998.
While hedge funds and venture capital firms had recorded over $70 billion in crypto assets under management (AUM) by the year 2021, banks and corporations had registered $2.5 billion, government funds had recorded $4 billion, and pension funds had recorded $1 billion.
The trend suggests that there will be gains, and there is a chance that these investments may be profitable in the long term.