Why did crypto ownership nearly double in these regions?
Cryptocurrency ownership is becoming increasingly popular around the world. In some regions, it has nearly doubled in the past two years. Multiple factors have contributed to this rapid growth in this burgeoning financial technology sector.
This article will explore why the number of cryptocurrency owners, particularly in certain regions, has rapidly increased over the past two years. It will cover an overview of both the underlying causes and factors that have been driving adoption as well as look at why cryptocurrency is becoming more accessible and accepted by traditional financial institutions, leading to a booming global market.
By understanding these dynamics and drivers, readers can form an informed perspective on why crypto ownership has nearly doubled in certain regions and what this may mean for their adoption journey.
Crypto Ownership Nearly Doubled in U.S., Latin America, and Asia Pacific in 2021
According to a report released by Chainalysis, cryptocurrency ownership in the United States nearly doubled in 2021, with more people investing in digital currencies. This dramatic rise in adoption can largely be attributed to the increasing availability of crypto platforms and the increasing trust in the technology.
This trend can also be seen in Latin America and the Asia Pacific region, with similar increases in ownership.
Let’s take a closer look at the reasons behind this crypto boom.
Growing Interest in Crypto
The world has witnessed an interest in cryptocurrency over the past year, with ownership of crypto assets nearly doubling in the United States alone. As more people become aware of the potential benefits – from faster, more secure payments to access to global markets – enthusiasm for digital currency continues to grow.
Various factors can explain why ownership rates are rising in certain regions and less so elsewhere. For example, residents in countries with well-developed financial institutions and comparatively low poverty levels may be more likely to invest in digital currencies than those living in locales with a underserved banking systems or high levels of unbanked citizens.
In addition, regulatory considerations are playing a key role. Crypto investors often look for jurisdictions with robust safeguards and regulations that protect them from fraud, manipulation, and other practices that stifle innovation or threaten investment gains. This may be particularly true for millennials and Gen Zers looking for ways to diversify their portfolios or access investments not otherwise available through traditional means.
Finally, there is a strong correlation between crypto ownership rates and countries that have dedicated efforts to digitize various aspects of their economy – such as banking services or government processes – as this often provides consumers with greater confidence when investing in new technologies like blockchain-based tokens.
In short, while there is no single answer as to why Twitter users have been more receptive to cryptocurrencies than others worldwide, it’s clear that growing interest it here to stay as more people begin embracing this revolutionary form of financial technology.
Throughout 2019, the U.S. saw increased cryptocurrency ownership and use, with a near doubling of ownership in some regions. This surge can be attributed to regulatory clarity from the government and technological advances that have made it easier for investors to get involved in the asset class.
The Securities and Exchange Commission (SEC) began taking steps toward regulating the crypto industry late last year when it proposed formal rules for how companies should register certain digital tokens or coins as securities, paving the way for greater legitimacy for cryptocurrencies. The SEC also clarified who can invest and how much they can invest in digital tokens, helping to ensure that investors understand what they are buying and how financial transactions work within a given asset class.
This regulatory clarity has provided clarity to investors who previously may have hesitated to invest due to unclear rules of ownership or recognition among financial institutions. In addition, heightened publicity surrounding Bitcoin’s run-up over 2018 highlighted the potential of digital assets as an investment option and has encouraged those curious about cryptocurrency ownership to dive deeper into understanding it as an asset class before investing their capital.
In tandem with SEC regulations, advancements in technology have also helped spur on nationwide adoption of cryptocurrencies like Bitcoin as possible investment vehicles. DeFi protocols allow users to access decentralized assets such as Ethereum-based currencies through simplified exchanges and wallets available across nearly any device. These advances help streamline processes associated with investing into the crypto asset class even further by providing access to secure platforms that offer alternatives beyond traditional financial services providers or banking entities.
Overall, increased regulations from government entities coupled with technological advancements have spurred adoption of cryptocurrencies across many U.S states throughout 2019. They will continue doing so over 2020 as both continue advancing user experience when dealing with crypto assets.
Increased Accessibility & Adoption
The rise in crypto usage cuts across gender, with 54% of men and 52% of women holding or transacting in digital wallets — up from 43% and 45%, respectively, in 2019. The surge can be attributed to increased accessibility, adoption and cryptocurrency awareness.
Awareness is likely one factor contributing to increased adoption. In 2019, 31% of the surveyed Americans indicated that they had at least some familiarity with digital currencies. But a quarter of those surveyed said that their choice to invest was affected by increasing media coverage and more extensive learning resources about cryptocurrency on the internet.
Another major contributing factor may be the emergence of easy-to-use user friendly cryptocurrency wallets accessible to individuals on their phones or desktops. Additionally, more companies are exploring ways to leverage blockchain technology for payments and fundraising as an alternative to traditional banking procedures; 7% of survey respondents now owned digital currencies after their employer introduced them as payment.
Finally, major tech companies such as Facebook are integrating blockchain payments into their systems; adding increased publicity and awareness surrounding cryptocurrency use cases. Professional investors such as Mark Cuban are also promoting cryptocurrencies across various channels. This can be seen as part of an overall movement towards easier methods for individuals without technical expertise to manage cryptocurrency securely without having to delve deeply into code and complex procedures associated with traditional crypto-banking architecture – likely driving further adoption from first-time users in these regions.
Crypto ownership has nearly doubled in the Latin American region in 2021, especially in countries such as Mexico, Chile, and Peru. This has come as a result of economic uncertainty in the region, which has pushed individuals to search for alternative investments that would provide a safer and more secure return.
Additionally, the region’s existing infrastructure for digital payments and other financial products has made it easier for users to buy and sell cryptocurrencies.
When looking at countries considered “emerging markets,” economic instability has proved to be a dominant factor in the surge of cryptocurrency ownership. Latin American countries such as Argentina, Mexico, Chile and Colombia are particularly ripe for cryptocurrency growth due to their economic conditions — thanks to high inflation and currency devaluation.
Crypto is seen as an attractive alternative because it offers users more protection than their unstable currency. Crypto’s decentralized nature also allows users to avoid banks entirely when transacting since it eliminates third parties involved in payment processing. This is especially useful for remittance payments or sending money outside of one’s country (which comes with exorbitant fees).
While crypto ownership has increased exponentially due to the economically unstable climate of Latin America — equally important is the increasing prevalence of technology and access to mobile devices. Over the past decade, smartphone ownership throughout Latin America has spiked, furthering possibilities and exposure for would-be crypto owners across these regions.
Political turmoil has been a major driver of cryptocurrency adoption in Latin America. The region is plagued by political unrest, high inflation, and weak economic growth. In Argentina, inflation has been on the rise since May 2018. Economic growth has been weak for several years due to structural problems including high unemployment, corruption, lack of trade openness, and weak credit access for small businesses.
In Venezuela, the economy has been crippled by hyperinflation due to the government’s failed policies. To cope with this situation people have turned to crypto currencies as a potential hedge against inflation and store of value. Additionally, in Mexico during 2018 public dissatisfaction toward political parties sparked protest leading some to turn tto crypto currencies to remain anonymous when participating in discussions criticizing the maligned incumbents.
In Bolivia hyperinflation has affected savings of citizens driving them to turn towards cryptocurrencies as an alternative asset class not affected by political instability or fluctuations in exchange rates. In Peru cryptocurrency transactions are largely unregulated which make it attractive compared to traditional asset classes where buyers must go through lengthy regulatory procedures.
Lastly, Brazil experienced a declining economy from 2015-2016 due to corruption issues linked with its former president dilma Rousseff. As part of President Dilma’s legacy tax legislation favored offshore crypto exchanges resulting in large-scale investment into Bitcoin for tax avoidance purposes leading ultimately increased adoption of cryptocurrencies in Brazil.
Increased Accessibility & Adoption
The rapid increase in cryptocurrency ownership in Latin America can be attributed to increased accessibility and adoption. The high levels of interest stem from citizens who have seen the potential of cryptocurrencies to drive economic development in their communities. Improved access to blockchain technology has enabled users in these regions to securely transact, store digital assets, and make payments without needing third parties.
Furthermore, over the past few years there has been a surge of financial institutions offering their customers the option of purchasing cryptocurrency with local currency. Moreover, growing media coverage on Bitcoin and other digital assets and increasing regulatory clarity have made it easier for users to acquire cryptocurrencies via trustworthy exchanges.
The booming cryptocurrency market indicates the ubiquity and stature digital money has attained across Latin America and globally. Latin American countries have been particularly receptive towards cryptocurrencies due to their historical distrust of centralized financial institutions like banks. This extreme opacity regarding individuals’ financial activity is what Bitcoin was created against to promote financial inclusion and privacy protection while transacting or storing money digitally.
The Asia Pacific regions have seen a significant increase in cryptocurrency ownership in 2021. According to a survey conducted by Global Digital Finance (GDF), the number of crypto owners in the Asia-Pacific region nearly doubled from 21% to 38% from 2020 to 2021.
This increased interest in digital currencies has been driven by various factors. In this article, we will discuss why crypto ownership has grown so quickly in the Asia Pacific regions in 2021.
Growing Interest in Crypto
The interest in cryptocurrency and investments in blockchain technology have nearly doubled in the Asia Pacific region during the past year. This surge of interest and investment can be attributed to Fintechs, such as startups, providing simple methods to access energy efficient transactions and digital currencies, such as Bitcoin and Ethereum.
In this region, investors are eager to capitalize on the market potential presented by digital tokens. For example, the crypto market capitalization is estimated at over $2 billion and has grown steadily over the last few years. This increased popularity has encouraged many companies to launch new cryptocurrency products and services across different countries in Asia – from exchanges offering peer-to-peer transactions for customers to a wide range of FinTech enabled solutions for global remittances.
Driving this growth is a combination of technological innovation by Asian companies, increasing consumer understanding of blockchain technology, increasing demand from traditional investors looking for more ways to diversify their portfolios, plus potential government support for cryptocurrency utilization such as Japan’s 2017 decision to recognize Bitcoin as legal tender.
Furthermore, with so much opportunity for growth within the nascent industry increasing consumer awareness surrounding both opportunities and risks associated with Digital Assets is key. As cryptocurrencies gain even more traction within everyday life it will be important for consumers to understand which jurisdictions are opening up pathways towards creating reliable regulations that support consumer protection while allowing businesses enough flexibility to innovate across borders while still doing so responsibly.
Regulatory clarity continues to increase in countries within the Asia-Pacific region, leading to increased public confidence and adoption. According to Chain Analysis, a digital forensics firm, crypto ownership in the Asia-Pacific region has nearly doubled since 2019, largely due to regulatory clarity and consumer demand for digital assets.
A few notable countries at the forefront of regulatory clarity include Thailand and Singapore. According to their respective central banks, Thailand’s Securities and Exchange Commission has granted a license to crypto business operators. In contrast, Singapore’s Monetary Authority of Singapore (MAS) has put forward regulations specifically tailored towards crypto businesses that apply anti-money laundering (AML) principals.
Additionally, Singapore recently announced an RMCO – Revised MAS Crypto-Currency Regulatory Framework regarding blockchain operations and cryptocurrency exchanges – which covers topics such as Anti Money Laundering (AML), licensing requirements for exchange operators and AML guidance for Initial Coin Offerings (ICOs). Not long after this announcement was made, Japan also released its update on the Payment Services Act – allowing exchanges that are registered with the country’s Financial Services Agency (FSA) easier access into another part of the market that could be potentially used as a bridge between digital assets and fiat currency. These two examples contribute heavily towards increased regulatory clarity within the region.
The ongoing development of regulatory frameworks around cryptocurrencies by authorities within the Asia-Pacific regions provides greater assurance to consumers looking invest in digital assets; however there is still more work needed before the adoption rate can reach its full potential. Nonetheless improved regulation is having an impact on crypto ownership across these countries.
Increased Accessibility & Adoption
The cryptocurrency market in the Asia Pacific region has grown significantly over the past few years, driven by increased accessibility and adoption of digital assets. As a result, surveys have revealed that crypto ownership in these markets is nearly double what it was in 2018.
Several factors have contributed to this growth. Firstly, an increasing number of governments are beginning to recognize and embrace the potential of blockchain technology, providing more legal certainty and boosting investor confidence. Secondly, accessibility has been greatly improved due to tech advancements such as mobile payments and wallets tailored for those new to cryptocurrency trading. This easier access has facilitated onboarding more users who would otherwise be left out due to complicated procedures or lack of resources.
Furthermore, investment activity within cryptocurrency markets has increased significantly as well. According to recent research published by PrimeXBT, nearly twice as many traders actively participated in crypto trading contests during the first quarter of 2020 as last year. Additionally, institutional investors continue to develop an ever-increasing appetite for digital assets as they look for attractive growth opportunities amid a recent shift toward tech-heavy portfolios.
These favorable conditions have led to a dramatic increase in overall market capitalization from approximately $90 billion at the start of 2019 –to almost $250 billion currently– even despite persistent volatility throughout 2020 caused by pandemic fears and economic uncertainty world-wide. As countries around the globe continue their exploration into cryptocurrencies and blockchain technology applications evolve further it’s likely that this trend will continue moving forward.
The research shows that crypto ownership has nearly doubled in countries with a high level of government regulation and/or control of the financial system and currency. This could be due to the rising demand for cryptocurrencies, as those in countries with greater government regulations seek an alternative form of currency and asset. It could be the impact of their home governments seeking to close the gap on their citizens, or open up growth opportunities.
What this data indicates is that regardless of motivation, citizens are taking advantage of the opportunity provided by digital assets such as cryptocurrencies; be it out of necessity due to lack of access or trust in their governments, or simply out of personal profit-seeking desire. It is a great sign that despite all the uncertainty surrounding this space, people still want to engage more widely with digitally-enabled possibilities.
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