In recent years, cryptocurrency and its underlying blockchain technology have been hailed as everything from a safe haven from inflation to a revolutionary alternative to traditional government-backed fiat currencies. The recent crypto market nosedive has cooled these sentiments somewhat, as exchanges post record losses and cut back on staffing, with some already showing signs of insolvency. While the crypto “gold rush” appears to have waned, a recent report by Boston Consulting Group (BCG) predicts that the number of crypto users will continue to grow, reaching 1 billion people by 2030.
“If we use the number of cryptocurrency holders as a proxy for Web3 users, and benchmark it against the adoption rate of Internet users in the 1990s, the message is clear: there is plenty of growth to come. While it is difficult to predict if the trendline of crypto adoption continues, the total number of crypto users is likely to reach 1 billion by 2030,” the report said.
Beyond growth predictions, the BCG report provided additional insights into the market, stating that only 0.3% of individual wealth is held in digital assets, relative to 25% in equities. Currently, retail investors are holding the most cryptocurrencies, while the adoption rate of institutional investors lags behind. A notable exception to this is hedge funds and venture capital firms being more willing to take on the greater risk and unpredictability.
BCG’s report also highlights geographical differences in current and future crypto growth, with North American investors currently leading with average holdings of $18,000, relative to investors in Africa holding an average of around $190. The report suggests that growth will largely be driven by the ongoing consolidation and market penetration of crypto exchanges, which have the potential to overtake local exchanges due to the strength and capacity of their platforms, combined with agile product development.
While the 2022 crypto market meltdown may have cooled speculators’ enthusiasm for cryptocurrencies, it appears that the current level of adoption by larger companies may see the digital currencies continuing to serve as a viable means of exchange. If BCG’s researchers are correct, the story of crypto is far from over.