The cryptocurrency industry is growing rapidly, and there seem to be no signs of a halt, especially with the introduction of Web3 and recent innovation in DeFi. As digital asset adoption increases and use cases surge, traditional finance appears threatened by this rapid expansion; and rightly so – a recent research has revealed that the number of crypto users is expected to grow to over 1 billion in the next 8 years.
North America has the highest adoption rate for any region in terms of investment
A joint report published by Boston Consulting Group, Burger and Foresight Ventures indicates that cryptocurrency is still at its infancy, and the industry is expected to surge further over the years, further stating that the number of crypto users is expected to grow to 1 billion if the industry keeps up at its growth pace.
The report notes that, regardless of the increase in use cases, adoption in the crypto industry is still low compared to traditional investment assets. The Boston Consulting Group noted that an estimate of only a meagre 0.3% of individual wealth is currently in crypto investments in the global scene, as compared to 25% invested in equities.
This is partly due to the efforts by financial authorities in several countries to stifle the growth of the industry by prohibiting purchases and trade in the asset class. Most of these authorities cite the sharp volatility that characterizes the crypto markets as a core reason. Lack of definite regulatory frameworks and proper consumer protection measures is another determining factor.
Furthermore, according to the report, crypto adoption rate in terms of investment choice is understandably higher in some regions than others. Africa as a region sees the least adoption rate – estimated average individual wealth investment in the continent is about $190, as opposed to $18,000 in North America which sees the highest rate of adoption.
Hedge funds and venture capital firms show the most interest in crypto
The report mentions that individual investors are the biggest holders of digital assets, but institutional investors appear to be showing more interest in the industry, especially of late. This is expected, considering the economic downturn macroeconomic conditions have produced. A lot of firms are looking to new asset classes for investment opportunities, and digital assets seem to be the next stop.
Per the report, hedge funds and venture capital firms show the highest interest in crypto investments amongst Institutional investors, having almost doubled their combined crypto holdings to $70B in recent times.
“Despite the recent crypto market slowdown, we believe that crypto economy is here to stay,” the report posits. This is especially accurate, considering the fact that the major crypto assets have significantly grown to create new realities and higher expectations from investors of late.
Furthermore, cryptocurrencies and DeFi aim to address the weaknesses encountered by traditional finance. Regardless of the efforts at stunting its growth, the crypto industry looks primed for a further expansion in the near future.