Cryptocurrency Market Size Analysis — Too Big to Fail?
The problems induced by the pandemic have left the global economy in disarray while investments in the crypto world plummeted. However, cryptocurrencies showed remarkable flexibility and resilience, remaining a viable alternative to traditional currencies.
On the other hand, the crypto market is not immune to pandemics and economic turbulence, so the long-term consequences are hard to predict.
Cryptocurrency Market Size After COVID-19
The global coronavirus outbreak accelerated the adoption of digital currencies as an alternative to traditional payments for goods and services. In addition, the online-only nature of cryptocurrencies removed liquidity constraints and allowed for uninterrupted trading activities despite lockdowns and quarantine measures.
Now that these unprecedented times are behind us, we can look at the crypto market size and assess the impact of the pandemic. For instance, the price of Bitcoin plummeted to below $4,000 in early 2020, causing many blockchain enterprises to cut budgets and reduce their workforce. Likewise, work-from-home strategies interrupted many potential partnerships.
Even so, the leading virtual currencies like Bitcoin and Ethereum remained popular worldwide, ready to drive the market in the upcoming years.
(Fortune Business Insights)
Cryptocurrency Market Size and Forecast
According to a 2021 IMARC Group study, the global crypto market reached $1,78 billion. Similarly, data from Allied Market Research reveals that the size of the worldwide cryptocurrency market in 2020 amounted to $1.49 billion.
Thus, virtual currencies showed remarkable resilience amidst the pandemic, significantly increasing the global cryptocurrency market size.
So, despite the problems, there’s room for optimism, and some experts even predict a 58.4% growth rate for the following five years. More precisely, the market size could reach $32.42 billion by 2027. More modest predictions expect a 12.8% CAGR between 2021 and 2030, resulting in a total market value of $4.94 billion at the end of the decade.
(Allied Market Research, IMARC Group)
Cryptocurrency Market Size by Country
In 2022, the user penetration in the cryptocurrencies segment was around 3.4%, with a tendency to reach 4.4% by 2027. Therefore, the number of users worldwide will grow, increasing the revenues and the overall market size.
However, Statista reveals that countries in Asia, Africa, and South America have the most crypto-friendly population increasing the total size of the cryptocurrency market. For instance, one in three people in Nigeria owns or uses a digital coin, compared to six out of 100 survey respondents in the United States.
Then again, countries like Russia and the US have the highest Bitcoin (BTC) trading volume, with North America accounting for 18% of the global cryptocurrency market. Latin America accounts for 9%, with Brazil being the leading crypto country in the region. Of course, Europe accounts for 25% of the global market.
Cryptocurrency Market Trends
The prices of most cryptocurrencies tumbled to unseen lows in 2022, well off their record-breaking highs in November 2021. As expected, the growing Federal Reserve interest rates and the high inflation prompted investors to shift toward conservative opportunities, causing massive instability in the crypto segment.
Unfortunately, many experts agree that the current cryptocurrency market size will continue to shrink as long as investors look at virtual currencies as a risky asset class. For example, Bitcoin has lost approximately 60% of its trading value since the beginning of 2022, while Ethereum’s prices dropped by 67%.
Yet, a declining market can quickly transform into a bull market, and the crypto segment could grow because of the inherent volatility of virtual currencies. These deep pullbacks have happened before, but anyone looking to ‘buy the dip’ should proceed cautiously since the bumpy ride is not over.
The latest cryptocurrency market data shows a worrying trend, but things could turn around sooner than expected. After all, virtual currencies have always bounced back, and the global crypto market seems too big to fail. However, catching a falling knife typically ends in pain, and many investors could learn this rule the hard way.