Recently, the cryptocurrency industry has shown serious growth rates, which became especially noticeable at the end of 2020 amid Bitcoin’s leaps and bounds.
Today, the market capitalization of the entire coin market – that is, the product of their number by the corresponding exchange rate – is $ 976 billion. The peak of the indicator was recorded on January 10, it amounted to $ 1.11 trillion. The industry did not reach such numbers even during the massive growth in 2017.
According to the so-called «Global Cryptocurrency User Index 2021» from the research department of the cryptocurrency exchange Binance, approximately 97 percent of cryptocurrency enthusiasts around the world are «almost unanimously confident» in the bright future of digital assets.
The report of the company representatives was built on the basis of a survey of more than 61 thousand traders and investors from different countries. Let’s talk about the results of the study and the conclusions from it in more detail.
Here is the overall niche capitalization chart for all time.
Analysts agree that the cryptocurrency market has indeed moved to a growth stage after a three-year decline, and the latter may last for a long time. Hence, it is not surprising that the owners of cryptocurrencies are counting on a further increase in rates.
This is especially true against the background of the current behavior of coins. For example, Dogecoin managed to jump in price by 800 percent in a day, after which a collapse followed. Exactly a day ago, the coin was worth 1 cent, and at the peak of growth, the rate was 7.8 cents.
What will happen to cryptocurrencies
Here is one of the quotes from the report, in which company employees talk about the results of their work. The cue is from Decrypt.
According to the study, users almost single-handedly trust cryptocurrencies – this is 97 percent of those surveyed. More than half – 52 percent – consider investing in cryptocurrencies not a hobby, but a means to generate income. For 15 percent of crypto enthusiasts, digital assets are the main source of income.
As you can see from these numbers, only a minority of cryptocurrency investors recognized coins as their main source of income, that is, one that would come to them on a regular basis. Obviously, we are talking about successful traders who know the basics of investor behavior. Holders – that is, holders of long-term cryptocurrencies – also make money from the growth of coins. However, since they sell cryptocurrencies much less often, they cannot call such a source of income the main one.
In terms of motivation, the researchers noted that 55 percent of respondents buy crypto as part of their long-term investment strategy. At the same time, 38 percent of users switched to digital assets due to distrust of the existing financial system, and 31 percent entered the cryptocurrency market in search of short-term trading opportunities.
There are enough reasons for mistrust in the modern financial system. The most recent example of this is the struggle between Reddit users and large Wall Street funds, which we learned about the day before. That is, a group of people deliberately undertook to buy up shares of GameStop in order to punish the giants of the financial industry who made money on their fall. In the end, it all ended, among other things, with the fact that some platforms – like Robinhood – forbade users to buy the mentioned shares, which is essentially a help for funds and censorship of the free market.
As expected, Bitcoin still dominates the minds of many cryptocurrency enthusiasts. Binance analysts have found that 65 percent of people who have bought a crypto at least once have had a deal with Bitcoin. At the same time, 30 percent of the owners of the main cryptocurrency said that they usually devote from 1 to 20 percent of their investment portfolio to long-term storage of BTC.
This fact is easy to explain: until now, in order to acquire the vast majority of altcoins, users first need to buy Bitcoin. And already through trading pairs with BTC with a sufficient level of liquidity, they can stock up on alts. In addition, the share of Bitcoin in the total market capitalization still exceeds the threshold of 60 percent, that is, in fact, the cryptocurrency niche is associated primarily with BTC.
The data also shows that most crypto enthusiasts either simply hold their assets (39 percent) or block them on decentralized lending platforms and earn passive income from it (22 percent). And only 11 percent actually use their digital assets for payments. But this does not necessarily mean that cryptocurrencies lose the characteristics of money. Here is a quote from the experts.
While the use of cryptocurrency as a medium of exchange may not be perceived as the most important use, as stated by 21 percent of respondents, in fact, cryptocurrency serves as money even more than users expect.
We believe that this study is a serious positive for the cryptocurrency market. He confirms that traders and coin holders are positive. And since the mood determines their actions – like the same purchase of cryptocurrency, in the end, all this can really develop into large-scale growth.
Therefore, this is a really good time to join the industry.