Bitcoin Adoption

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24 November 2021 | ZebPay Trade-Desk

Bitcoin (BTC), the world’s most popular and largest crypto asset has caught the elevator to rally and is enjoying its first-mover advantage. In some cases, the asset has also become a medium of exchange, apart from being just a store of value. There are now around 15,000 businesses accepting cryptocurrency payments around the world, and over 2,000 of them are in the United States. For instance, one can pay with BTC at the Seacoast Repertory Theater in Portsmouth too. Bitcoin doesn’t come without controversy, but one fact is indisputable: more and more merchants and locals are ready to accept digital currency for payment.

Cryptocurrencies are growing massively in popularity.  Research conducted by Chainanalysis shows cryptocurrency adoption increased 880% in 12 months this year and the number must have grown much more in the past two months with India ranking among the top markets in the fast-growing crypto,  occupying the second place while Vietnam took the first one. Research also suggests that the cause for this increased adoption differs across the world: in emerging markets, many are turning to cryptocurrency to preserve their economies in the face of currency devaluation, send and receive remittances, and execute. of business transactions, while adoption in the North

Over the past year, such as America, Western Europe, and East Asia have been largely fuelled by institutional investment. In a year where cryptocurrency prices have risen dramatically, each region’s respective reasons for adopting the asset class appear to have proven to be compelling. 

While China doubled down on the crackdown on crypto buying & selling as well as the exchanges in September, the rest of the world was more supportive of the new wave of technological innovation offered by blockchain. Brazil is seeking to accept BTC as a legal payment method, according to the country’s MP. It will be the second country to accept BTC after El Salvador (a Central American country) if it materializes. In Africa, Nigeria’s Federal High Court has approved the launch of a central bank digital currency (CBDC),  called eNaira, as legal tender in the country. According to the International Monetary Fund (IMF), more than 100 countries are considering launching CBDCs in the near future.  

However, the Indian government’s approach to cryptocurrency regulation has been restrained since 2018 when the Reserve Bank of India had banned banks from dealing with virtual currencies and such companies, but a court order was overturned in 2020.  Earlier this year, the government said it is proposing a bill that will make it illegal to issue, hold, or operate cryptocurrencies, except for government-backed virtual currencies. But the status of this bill has not been clear since then. While the government is thinking about mandating and regulating the space, the steps that it takes remains to be seen, however, the outlook is largely positive. 

Meanwhile, the world over several countries has taken bold steps to recognize cryptocurrencies. These include Singapore,  the European Union, the United Kingdom, Japan, Canada. These jurisdictions have proactively recognized and regulated cryptocurrency exchanges. Their rules are of three kinds.  First, most of these jurisdictions have imposed registration and reporting requirements for agencies and even P2P applications. Second, and most importantly, all of these regulate exchanges from a Know Your Customer (KYC) perspective, anti-money laundering, and anti-terrorist financing – these are the corners in which they are regulated. The third is taxes which vary widely, some call it capital gains, others call it business income, so taxation varies widely. Several other countries like UAE, Australia, Venezuela have been coming out in support of crypto space. UAE is trying to be the center of the crypto world and Australian parliament members are showing vocal support while Venezuela has promised to provide Axie Infinity scholarships for training courses in crypto. 

The BTC rally earlier this month which made it create a new ATH was caused mainly by the launch of the first Exchange Traded Fund which linked it to the asset futures prices on the New York Stock Exchange which started trading last month provided it the much-needed boost.

Another important cause for the whole market going green was the news that the Australian Securities and Investments Commission (ASIC) approved the spot exchange-traded funds in Bitcoin as well as Ethereum and also provided the best-practice guidelines and requirements for issuers. They are likely to drive wider adoption among investors who are currently skeptical of cryptocurrencies. Similar products were approved in countries like Canada and New Zealand and Investors worldwide have placed their hope that new funds will be able to enter the dynamic crypto market through this newly regulated financial product.  

Major US-based banks are already expanding their services to allow their clients to invest in cryptocurrencies. JPMorgan has been watching the trends this week with a note on institutional investors in the United States who have preferred BTC to gold as a hedge against inflation in recent weeks. Visa is working on an interoperable blockchain hub capable of connecting to multiple blockchain networks and enabling transfers of different cryptocurrencies from various protocols and wallets.  The Minneapolis-based US bank has set up cryptocurrency custody services for institutional investment managers with private funds seeking exposure to BTC. Twitter extended its BTC failover feature to all iOS users around the world this week. As we head into the end of 2021, we expect some of the bigger companies to announce their BTC investments as part of their quarterly updates, giving more momentum to the market.  

Bitcoin has risen by around 201% since last November. The average price of Bitcoin was $ 19,107 last November while it is around $ 57,569 this year. The price increase can be attributed to several factors. TESLA began adopting Bitcoin as a payment method, which later made Uturn. El Salvador’s decision to make bitcoin legal tender but was heavily criticized by the World Bank. Another country that has taken a step forward is Argentina, whose president sided with Bitcoin and the CBDC, but was rejected by their central bank. Paraguay appears to be next in line.

Microsoft has been the software industry leader in bitcoin adoption since 2014. But due to volatility, they’ve limited it to Xbox credit stores for now. They would also use the ethereum blockchain to prevent hacking. Ethereum prices have risen 360% in the past 8 months. Websites like CheapAir and Shopify also allow you to shop and book flights using Ethereum and Bitcoin. Many countries like Australia still reject Blockchain technology as the Old West, but countries like China and America are trying to put more regulation in place. China has banned the mining of cryptocurrencies and their use as a transaction method for the outflow of capital through those currencies. And the United States has been trying to find a way to regulate the flow of digital currency, but with the passage of an infrastructure bill that does not mention digital currency, how to do it remains a mystery. Despite these challenges, over the past year or so, a number of new companies have accepted cryptocurrencies including KFC, Burger King, Starbucks, Glamentic, Whole Foods, Overstock, and more. Twitter CEO Jack Dorsey has also released its plan to introduce a new exchange whose white paper was just released last Friday as well as the tipping system of Twitter in BTC. 

Cryptocurrencies have expanded significantly over the last year or so. There have been various additions to the cryptocurrency family with new tokens entering and leaving an important mark such as Solana and Polygon, while other major assets such as Bitcoin and Ethereum continue to amaze the world with their growth. unstoppable. The market value of cryptocurrencies has surpassed $3 trillion with the recent uprising of bitcoin and other successive assets.

The most recent development with cryptocurrencies is that it is now widely adopted by global multinationals and even governments as the legal tender of money. Many leading companies and manufacturers such as Tesla, BMW, Microsoft, Burger King are embracing and accepting cryptocurrency. El Salvador was the first country to make Bitcoin legal tender, with emerging economies having the highest acceptance rate of these digital currencies, making it more attractive. While it’s hard to say which digital currency (if any) will rise further in 2021, we can confidently say that cryptocurrency gains aren’t going away anytime soon. The technology behind many cryptocurrencies, which is blockchain, has gone far beyond digital technology. In the coin industry, new applications are and will continue to appear. Governments and regulators will continue to determine how best to manage and manage digital tokens, and regulations around these assets are being worked out around the world as we speak. 

Like the internet, blockchain technology is here to stay, and likewise. We must therefore think about how to protect consumers from scams, risks due to the volatility, so there is a need for protection for mom and pop investors without killing innovation.  The great thing about the internet is that innovation can happen anywhere. It can happen in India, it can happen in Ghana or the Philippines. For the world, this acts as an opportunity to explore new ranges of products and services that are effectively borderless. Cryptocurrency adoption has exploded over the past twelve months, and the variation across contributing countries shows that cryptocurrency is a truly global phenomenon.

References:

https://coinmarketcap.com/

https://zebpay.com/blog/

https://www.coindesk.com/

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