The crypto world faced what is now known as the crypto winter, where the prices of Bitcoin and other digital assets fell drastically, with many projects ceasing to exist. Despite this, the adoption of Bitcoin increased, with some reports showing that about 60% of institutional investors invested in at least one cryptocurrency in 2022. Certain trends have emerged that point out why this is the case.
Expanded Regulation
When the crypto market experienced a downturn in 2022, there were many calls to regulate the market. Supporters of these regulations said they want them enacted to prevent risks such as those seen after the collapse of FTX and to build confidence in the crypto market.
These calls are working as the adoption of Bitcoin and other assets has increased in 2023. Confidence in these digital assets comes from the understanding that these regulations will eliminate bad actors and prevent market manipulation.
South Korea and Japan are leading the way and showing the world how proper regulation can lead to crypto adoption.
The Rise of User-friendly, Secure Platforms
A significant challenge many people face if they want to use, trade, or invest in Bitcoin is not understanding how to do any of these. The good news for those who want to get into the world of Bitcoin is that there are now user-friendly and secure platforms that make doing so as easy as trading or investing in any other investment option.
They allow you to buy and sell Bitcoin without having to understand the underlying technology. If you have some knowledge about investing, the procedures are the same, with the difference being what you are trading or investing in.
To make things even easier for users, there are platforms providing apps that make it easy to buy, trade, or invest in Bitcoin wherever you are. You can check out this River Financial vs. Swan comparison that goes into more detail.
More Institutional Investors
The higher number of institutional investors is also leading to increased adoption. A survey by Coinbase shows that 62% of institutional investors now hold crypto assets, with many increasing their holdings in late 2022 and early 2023. Of those surveyed, seven in ten said they see the value of crypto assets increasing, which makes more people confident in the market and, thus, more likely to engage.
Shima Capital, Barclays, and the South Korean Government are some of the notable investors driving this trend.
Web3 Integration
Web3 technologies rely on the same blockchain networks that crypto-assets do. Many web3 projects also have underlying coins or tokens that individuals and entities can buy or invest in. These technologies are opening up numerous opportunities in numerous sectors, including finance, gaming, manufacturing, and fashion, and they are bringing their coins and tokens along with them.
As international companies like Equinox, Nike, Dior, and Off-white adopt web3 technologies and
Despite what happened in the crypto market in late 2022, we are still seeing high levels of cryptocurrency and digital asset adoption. We can only wait to see how far the trends discussed above will push this phenomenon.