- The total number of people holding digital assets is still relatively low compared to other investment opportunities.
- In less than a decade, the crypto market could rise significantly.
There are a variety of cryptocurrencies in use today, including Bitcoin, Ethereum, Dogecoin, and Tether. These digital assets have captured people's attention from all walks of life, with some referring to it as monetary evolution.
Despite the volatile nature of cryptocurrencies, the market has seen a steady increase in the number of people who own digital assets. According to an analysis by BanklessTimes.com, the number of people who own cryptocurrencies could exceed 1 billion by the end of 2022.
BanklessTimes CEO Jonathan Merry says,
People have begun to realize that cryptocurrencies are here to stay and offer many advantages over traditional investments. Compared to stocks and real estate, cryptocurrencies are much more accessible and offer a higher potential for returns. We believe that the number of people holding digital assets will continue to grow in the next few years.BanklessTimes CEO, Jonathan Merry
Cryptocurrencies over Traditional Investments
Global crypto users have been increasing steadily over the years. For instance, the number of Ethereum Cumulative Unique Addresses has grown from around 170 million a year ago to over 206 million in 2022, representing a 93% increase.
Cryptocurrencies have several advantages over traditional investments. For starters, they are borderless, global, and accessible to anyone with an internet connection. They also offer a high degree of liquidity and 24/7 trading.
Additionally, cryptocurrencies are not subject to central control or manipulation. This feature makes them a more democratic form of investment.
The volatility of the crypto market is often seen as a disadvantage. However, this volatility also creates opportunities for investors to make significant profits.
Inflation and Crypto
Some investors flock to digital assets to protect their wealth from the impact of rampant inflation.
Inflation has been a major problem in economies such as Venezuela, Turkey, and Zimbabwe.
The Venezuelan government, for instance, has printed billions of new bolivars in an attempt to fix the country's failing economy. This printing has led to a drastic price increase and rendered the bolivar practically worthless.
Cryptocurrencies offer a way to avoid the effects of inflation. This is because they are not subject to central control and have limited supply.
While cryptocurrency offers many advantages, it also comes with some risks. That's why lawmakers are trying to figure out how to create laws and guidelines that will make cryptocurrency safer for investors and less appealing to criminals.
For instance, the Securities and Exchange Commission (SEC) is working on regulations protecting investors and preventing fraud in the United States. The agency has already charged several people and companies with defrauding investors in initial coin offerings (ICOs).
The SEC is also trying to crack down on illegal trading practices. On several occasions, it has issued warnings about "pump and dump" schemes, in which investors artificially inflate the price of a cryptocurrency before selling it at a profit.
Clear regulations will help to make the cryptocurrency market more stable and secure. This will encourage more people to invest in digital assets.