Understanding Crypto - Global Adoption
The world of finances has always moved forward with big leaps, with each leap changing the landscape of finances. We can not remember how the first ATM machines or first electronic fund transfers changed the world, as most of us were not alive then. But what we did see were Automatic Teller Machines (ATMs) popping up in every mall, then most left standing alone as each shop got its own payment terminal. And those are now going to be abandoned in favor of mobile payments. Of course, not instantly, but when was the last time you sent money through a telegraph system?
But one thing all of those innovations had in common. They were all started and implemented by the banks. They were the ones deciding which technology the world is going to use. But blockchains and cryptocurrency changed all that. It developed separately, decentralized, away from the banks. This is one of the rare times when banks can not set the rules, they have to follow the people.
It is impossible to know how many people own cryptocurrencies. You don’t have to register in your bank or with any other legal institutions. Even a person without a passport could have a crypto wallet. Because of that we use different counting methods. Cryptocurrency exchange Gemini revealed that more than 13.5 percent of Brits owned cryptocurrencies. While one third of all Brits feel “curious” about purchasing cryptocurrencies. At the same time the most popular US exchange “Coinbase” claims to have 43 million unique and verified clients.
According to a Crypto.com survey that was conducted in January 2021, there are over 106 million crypto users in the world. And those are only the people who have actually purchased cryptocurrencies. It is impossible to tell how many are curious, just haven’t made that leap. And with this market, it is clear that there is a great number of curious people.
Sure, a person can invest in cryptocurrencies just based on a belief, but companies are not ones to do that. Companies invest based on future predictions, market analysis and the need for profit. That is why whenever a big company decides to enter the cryptocurrency market, it is seen as a sign of validation.
The most famous case is Elon Musk’s company Tesla investing 1.5 billion dollars in Bitcoin. While this is the loudest investment that might be a short-term play, many big companies have invested in cryptocurrencies more gradually and fundamentally. With the help of these companies, the total market of cryptocurrencies surpassed 1.5 trillion dollars in February. That is equal to the GDP of South Korea, one of the most advanced countries in the world.
So no matter how you look at it, that is no small amount of money to be invested in a completely new financial field. Especially considering that this has all happened not because of governments and banking institutions, but one might even say “in spite” of them. For a long time banks and governments have disregarded cryptocurrencies and in some cases even banned them. But, despite all of this uncertainty, more and more people and institutions are participating in said market. So now the banks have to either follow them or be left behind because no one will be waiting for them. They have now realized that it is not a “fad”.
The financial sector follows
The giant money transfer company Paypal announced that it will let people hold and trade in cryptocurrencies. By creating a whole system for it, they are basically saying “crypto is here to stay and we are a part of that.” Mastercard has announced that cryptocurrencies are an important part of the financial world and will be supported on their network.
JPMorgan & Chase have created their own separate unit called “Onyx” which consists of 100 employees. A special digital currency division which is tasked to lead JPMorgan in the world of blockchains, cryptocurrencies and other future technologies. Many other financial institutions like BNY Mellon and Goldman Sachs are also joining the once-shunned market with various projects and services.
If any smaller banks and financial institutions don’t want to be left behind, they will either have to follow these examples or come up with their own innovations. But this is one of the rare cases where everything has been turned upside down. They do not have to follow the big banks. They have to follow the people, because that is what the giants are pressed to do. Many early adopters and investors have created their own institutions in the decentralized finance (DeFi) sector, meaning that the rules have already been set.
It is clear that cryptocurrencies are here to stay, that is for sure. It is safe to assume that in near future almost everyone will own at least a small amount of cryptocurrencies. Either for investing or as a convenient tool. So if you are now in possession of a crypto coin or token, you can be proud to be among the first people who jumped into the unknown and started a movement.
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