How are people’s attitudes towards cryptocurrency evolving, and what factors influence this change?
In the modern era, buying pizza with Bitcoin and owning NFTs has become mundane. People are now receiving cashback in cryptocurrencies, exchanges are rolling out educational courses, and businesses are incorporating digital assets into commonplace platforms such as social networks. So, how are consumers reacting to these shifts, and who owns cryptocurrency in 2023?
How has the profile of a cryptocurrency owner evolved over the past decade?
At the genesis of cryptocurrency’s development, its presence was largely unknown, barring a few tech-savvy enthusiasts and financial experts who happened upon an opportunity to receive Bitcoin as a form of payment. Consequently, tens of thousands of coins were used for online purchases or as novel gifts. This trend persisted until Bitcoin’s price spiked to $1,000 in November 2013.
However, even at this stage, the primary entrants into the cryptocurrency market were speculators and traders, as well as naive individuals drawn in by the allure of significant annual growth. These individuals often fell prey to sketchy projects, subsequently losing money and perpetuating the perception that “crypto is a scam.” Digital assets also found use among those looking to conceal the source of their wealth or fund illicit activities.
Yet, the landscape has shifted considerably over the past six years. Now, investment funds are accumulating cryptocurrency, with over 300 million individuals globally investing in it. The NFT market has experienced a whirlwind of activity, surging to the forefront before eventually receding. In certain countries, cryptocurrency has even supplanted bank cards and payment terminals as the preferred form of payment.
Based on research by Gallup, the majority of crypto investors are men aged between 23 to 34, comprising 41% of all holders. Holders aged 35 to 44 represent 20% of the total, with 16% aged 18 to 24. Interestingly, there’s been a notable increase in the number of individuals approaching retirement age (50+) showing interest in cryptocurrency. In 2018, this demographic made up a meager 1% of all owners. Now, this figure has grown to 3%.
Has cryptocurrency lost its perceived riskiness among people?
The answer is both yes and no. Many new investors are now aware of its existence, as hardly a day goes by without discussions around ‘all-time highs’, ‘bull runs’, and ‘halvings’. Attracted by potentially lucrative returns, individuals have started shifting their savings into digital assets. However, for many of these new investors, cryptocurrency remains an enigmatic concept.
On the flip side, large corporations such as Tesla and MicroStrategy, along with investment giants like Blackrock and Fidelity, have made their entry into the sector. This development has quelled some of the private investors’ fears, prompting them to allocate their funds into digital assets in anticipation of growth.
This shift explains why, since February 2022, there has been a rapid increase in the number of BTC wallets holding between 0.1 to 100 coins, even as the value of Bitcoin experienced a dip.
The summer of 2023 witnessed a doubling of BTC’s value from $15,000 to $30,000, further piquing investor interest. Looking ahead, events like the ‘halving’ (the reduction of miners’ rewards for a mined block) and the potential creation of a Bitcoin ETF have generated significant anticipation. While the impact of halving is somewhat predictable based on history, leading typically to an increase in BTC’s value, the concept of a Bitcoin ETF warrants further discussion.
Bitcoin ETF: Why is a value of $180,000 predicted for Bitcoin even before the next halving?
Hidden behind the esoteric term ‘Bitcoin ETF’ is a conventional investment strategy used in stock markets. Instead of buying cryptocurrency directly, investors purchase shares of funds that own cryptocurrencies. Thus, professional analysts, experts, and traders curate a portfolio of diverse cryptocurrencies that they believe will yield maximum profits. As a shareholder of this fund, you then receive a proportional increase in capital.
However, there’s a caveat: the SEC (Securities and Exchange Commission) has been resistant to the idea of Bitcoin ETFs. Despite this, the crypto community remains hopeful for the approval of this instrument. If approved, it’s expected to bring new investments and therefore drive the growth of leading cryptocurrencies. The potential upside of such an investment is estimated to be in the billions of dollars. This is why market research firm Fundstrat predicts that Bitcoin’s price could soar to $180,000 over the next nine months, based on daily market volume. Currently, Bitcoin sees $25 million worth of transactions every 24 hours. Experts believe that if a Bitcoin ETF gets approved, this figure could quadruple to $100 million. However, the next halving is still a way off, and the ETF hasn’t been approved yet. Hence, the increasing appeal of cryptocurrency must be attributed to other factors.
Cryptocurrency as an alternative to traditional banking
As of 2023, millions of people still lack access to traditional banking services, primarily in South America and Africa. However, with a smartphone and an internet connection, individuals from these regions gain access to digital assets. They can trade and make payments for goods and services using cryptocurrencies. The number of such users continues to grow.
The second driving factor is the global economic slowdown. In the wake of the COVID-19 pandemic, ongoing crises, rising central bank interest rates, and stock market downturns, people are striving to protect their assets from inflation. As a result, there’s been an upsurge in demand for cryptocurrencies.
The third factor is the emergence of new projects offering user-friendly tools centered around cryptocurrencies. Innovative social networks are now offering tokens as rewards for content creation and consumption. Marketing platforms are providing services to global brands and compensating audience engagement with digital assets.
Cryptocurrency exchanges have evolved beyond their traditional roles as trading platforms or cryptocurrency storage services. They now offer a broad ecosystem of products catering to all types of users. For instance, on Qmall, users can securely store or trade crypto, earn passive income through staking (similar to a bank deposit, but with digital assets), invest in NFTs, and participate in launchpads by purchasing tokens of new startups at a low cost. This offers many the opportunity to add the “next Bitcoin”, which was once worth less than $1 and is now highly sought after, to their portfolios.
Education also plays a critical role in the growing interest in cryptocurrency, with an increasing amount of instructional content available each year. People are beginning to understand the factors that determine an asset’s value, how to manage their capital, and which projects are trustworthy.
The cryptocurrency market’s audience is expanding annually. In less than two years, the Qmall community has grown to over 400,000 users, and new users continue to register on the exchange. This trend is representative of the broader market, indicating a promising future for cryptocurrency, regardless of current circumstances or the momentary value of coins. As to when to dive into this world, the choice is yours.
