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Cryptocurrency market forecasted to see growth, with transaction value reaching its peak by 2023

The latest publication of the Germany-based market intelligence firm yStats.com, “Global Blockchain and Cryptocurrency Market 2023”, gives an in-depth overview of the cryptocurrency market and the upcoming trends within the market. The report also highlights the forecasted transaction value of the cryptocurrency market as well as the growth trajectory of the crypto market across different regions.

The adoption and ownership of cryptocurrency are rising gradually across regions, in the backdrop of the crypto fall.

With mobile payment methods gaining popularity during the pandemic, consumers worldwide eased up to the idea of alternative methods of payment. Cryptocurrencies and other virtual assets became very easily accessible given the social distancing and lockdown norms, thereby gaining popularity during and post-pandemic. Although the value of the cryptocurrency market dipped slightly as of June 2022, the transaction value of crypto is forecasted to witness steady growth, with value reaching a figure in the billions of Euros as of 2023.  Despite it being a fairly new concept, cryptocurrency has piqued the interest of consumers globally, with nearly half the global respondents being crypto-curious as of February 2022. Furthermore, more than half of the consumers indicated to have already purchased cryptocurrency more than a year ago. However, the growth trajectory of the concept of virtual assets such as cryptocurrencies differs across regions. Some countries have already recognized crypto as legal tender, while others have banned the use of cryptocurrencies altogether. Moreover, Australia and India, the two economies of Asia-Pacific ranked the highest among the other countries globally in terms of ownership and adoption of cryptocurrency. The majority of the crypto-curious consumers in the region intend to invest in the asset by the end of 2022, as reported by the new yStats.com publication. The trend to use cryptocurrency as a means to purchase goods and services has already begun in Asia-Pacific. Moreover, luxury brands in the region have also started accepting payments in cryptocurrency. Although there was some excitement towards cryptocurrency, globally, there has been a slowdown in the investment and funding activity related to cryptocurrency and blockchain. The crash of the crypto market worldwide in 2022 sent shockwaves across the globe, with investors withdrawing their crypto investments. Furthermore, the drop in the value of the cryptocurrency at the start of 2022 has led to a decrease in consumer sentiments revolving around crypto. The decrease in consumer trust in digital assets is expected to further refrain consumers from investing in cryptocurrency in the middle and long term. As the cryptocurrency landscape faced challenges, the total investment in blockchain and crypto fell drastically.

Although the crypto market is evolving rapidly with some upcoming trends in the backdrop, a strong regulatory framework still needs to be in place

The crypto market saw an increasing trend in terms of the number of crypto owners as of 2022, with the number reaching a value in the millions as of December 2022. Moreover, M&A activities within the market are also increasing. The expansion of decentralized finance and centralized finance ecosystem is also shaping the crypto market. With the help of centralized finance, it is now possible to provide crypto-backed credit and debit cards as well as easy-to-use crypto interfaces, according to the new yStats.com report. The emergence of the concept of digital twins and non-fungible tokens (NFTs) is gaining importance for better asset funding and management, thereby accelerating the growth of the crypto market. Despite these trends shaping the crypto market, there is scope for improvement in terms of the regulatory framework. Banks and financial institutions are still hesitant to accept cryptocurrencies as legal tender. Policymakers also find it difficult to evaluate the risks of these assets. At present, there is no international coordination in terms of the set of regulations relating to cryptocurrency. There are also various differences across nations in terms of the laws governing crypto, while India is taxing the virtual asset at a higher percentage to discourage its use, Lichtenstein is the only economy to have proper regulation in place. The European Union and the UAE are also speeding up in establishing regulations for cryptocurrency, by implementing a completely new regulatory body to deal with the crypto market.