BCG, Bitget, and Foresight Ventures report says real crypto expansion is coming

Joint report According to the Boston Consulting Group (BCG), Bitget, and Foresight Ventures, cryptography is in the very early stages of adoption, especially in Latin America (LatAm) and Asia Pacific (APAC). ..

A report entitled “What’s the Future of Cryptographic Exchange?” Find out the growth trajectory of cyrpto adoption and the regions most likely to be adopted. According to the author, the market capitalization of crypto trading worldwide will reach $ 54 trillion in 2021 and is very likely to grow further.

Cryptography stays here

Analysis argues that the adoption of cryptography is still in its very early stages. BCG estimates that about 0.3% of an individual’s assets are held as crypto assets, while 25% are stored as stocks or stocks. The gap between them provides a lot of room for growth.

The report takes the number of crypto holders as a proxy for Web3 users, taking into account the adoption rate of the Internet in the 90’s, and concludes that the actual surge in adoption has not yet come.

“… If the trendline for cryptocurrency adoption continues, the total number of cryptocurrency users could reach 1 billion by 2030.”

Another Blockware study came to the same conclusion regarding the upcoming hiring surge.

Institutional adoption

The authors also conclude that institutional interest in crypto is growing and that venture capital and hedge funds are of greatest interest.

Institutional investors doubled their investment to $ 70 billion last year, so the report also states that “after the rise in tokens since the investment, the actual amount of cryptocurrency held will increase several times.”

One of the key reasons for institutional interest in cryptography is Bitcoin’s high performance as an inflation hedge. According to the report, S & P returned 29% in 2021, while Bitcoin was 62%.

Lat Am and APAC

The report points to Latin America and the advanced APAC economy as the regions with the highest potential for cryptocurrency growth.

In 2021, emerging economies and developed APAC countries accounted for one-third of the world’s spot trading volume and about 40% of the world’s derivative trading volume. From 2022, the report expects these regions through the derivatives market.

LatAm

Latin America currently accounts for 1% of the world’s spot and derivatives trading value and is very likely to grow. Binance is the region’s leading exchange and its regulatory framework supports cryptocurrencies.

Brazil, LatAm’s primary market, also has the potential for the highest crypto derivatives in the region, the report said. In addition, offshore platforms dominate the local crypto derivatives market. Therefore, the report concludes that “offshore players need to move onshore” to take advantage of the gap.

APAC

Southern Asia-Pacific regions such as Vietnam, Thailand and India account for 2-3% of the world’s crypto trading. Like LatAm, most regional exchanges are concerned about unclear regulations and avoid derivatives. However, the demand for derivatives is high. The author hopes that local regulators will adapt to demand and allow local exchanges to grow.

South Korea has the highest growth potential in the northern region of the Asia-Pacific region, which accounts for 30% of world trade. Again, the derivatives market is dominated by offshore platforms, but South Korea has great potential for the derivatives platform to recover. As soon as the regulations are relaxed, the same potential growth will appear in South Korea.

Other findings

According to the report, increased organizational participation, rapid development of web3, and increased crypto adoption in emerging markets are the three most effective macro factors to improve crypto adoption.

The report also concludes that the crypto ecosystem is consistently maturing at a good rate. The number of cryptographic applications in 2017 was around 800. This number reached a maximum of 10,000 as of July 2022.

Institutional trading volumes also surged from 20% in early 2018 to 68% in early 2022.

In 2021, the top five cryptocurrency exchanges (Binance, Okex, Coinbase, FTX, and Kucoin) accounted for 70% of spot trading and 90% of derivative trading. The report estimates that the top five exchanges account for 65-75% of the world’s spot contracts, given policy makers’ recent focus on cryptocurrencies. Regional estimates of the share of derivative transactions show that the tighter regulatory framework means that the top five exchanges will account for 80-90% in emerging markets and 70-80% in developed countries.