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Crypto Adoption Continues to Rise

May 6, 2022

Christina

Crypto Adoption Continues to Rise

From growing interest in Web 3 and the metaverse to an influx of talent from established industries like finance and technology, more and more people are actively incorporating crypto into their daily lives.

In this article, we’ll look at some of the most significant developments that highlight the continued growth of this exciting industry. 

VC capital pouring into crypto and blockchain startups

The crypto sector is capturing the imagination of an increasing number of traditional investors. Venture capitalists (VCs) poured a massive $32.8 billion into crypto and blockchain startups in 2021 alone, and that’s more than all previous years combined.

Furthermore, as of April 2022, VCs had already allocated a staggering $11.65 billion to startups in this area in just four months. This unprecedented amount of funding created an astonishing 47 crypto unicorns, with valuations above $1 billion.

Among the drivers behind these flows of capital are the rise of decentralized finance (DeFi), which secured some 43% of all investments in 2021, NFTs (non-fungible tokens) at 17%, and Web 3 metaverse dedicated projects. 

Talent from traditional finance pivoting to crypto

Continued innovation and the thrill of disrupting the status quo are piquing the interest of more talent from traditional industries like finance, leading CNBC to identify a rising concern for Wall Street: “The crypto brain drain.” Increasingly, financial employees are seeking positions in a more cutting-edge and rapidly growing space. 

With less regulation and more room to create, workers in crypto can really make an impact and revolutionize existing frameworks. There’s also a high upside in this exciting frontier, as salaries are starting to match and even exceed those of traditional finance. Institutions like JPMorgan and Goldman Sachs are also continuing to build out their crypto teams, already quadrupling their digital assets departments since 2015.  

Crypto ETFs launching around the world

With the notable exception of the US, which has yet to approve a Bitcoin spot ETF, citing concerns over price manipulation on exchanges out of the purview of the US regulator, the SEC, in other parts of the world, Bitcoin ETFs are gaining regulatory approval. The latest country to sign off on the launch of Bitcoin and Ethereum ETFs is Australia, following in the footsteps of Canada, Europe, and South America in making this more familiar type of investment vehicle available to investors.  

With a Bitcoin ETF in the US often viewed as the catalyst to increased investor participation in the market, could the SEC finally be set to follow suit?

Crypto increasingly accepted as a payment method

After a slow and shaky start, many large-name companies are now accepting BTC and other types of crypto as payment. From tech giants like Microsoft and Amazon to consumer goods like Starbucks and Tesla and more traditional companies like AXA Insurance and Pavilion Hotels and Resorts, more big names in a wide range of industries are jumping on this train. 

One of the latest prominent names to accept crypto as a payment method is the leading luxury real estate developer in Dubai, DAMAC properties. DAMAC will now allow for its real estate to be sold in BTC and ETH to support the growing digital economy in the region.

Another nation state adopts BTC as legal tender

After the waves made by El Salvador last year upon announcing BTC as legal tender, the second nation-state has now officially joined the Central American country. The Central African Republic announced on April 27 that BTC would now be legal tender in its territory, establishing a legal and regulatory framework for cryptocurrencies, and instating BTC alongside the country’s existing CFA franc. 

Finance Minister of the Central African Republic, Herve Ndoba, stated that sub-Saharan African countries are often seen as being one step behind when it comes to adopting new technologies, but that this move toward embracing BTC would radically change that narrative. “Our country is one step ahead,” he said.

It’s hard to see this announcement having much impact on the price of BTC as only 11% of the Central African Republic has access to the internet. However, the move puts an end to the question of which nation-state will follow El Salvador and restarts the discussion over which countries will be next.

Final thoughts: More to come

With so much action surrounding crypto, and global adoption on the rise, this is an industry paving the way for the future. The price of BTC and other cryptocurrencies may be some way from their all-time highs, but the steady building continues.

In fact, the Bitcoin hash rate marked another all-time high this week, making the network more secure than ever. With solid fundamentals and steady growth, there’s perhaps never been a better time to get into crypto.

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