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Cryptocurrencies are digital assets that use cryptography to secure transactions and operate independently of central authorities. The driving factor behind the widespread adoption of cryptocurrencies is the ability to conduct financial transactions securely with greater anonymity. Cryptocurrency technology also simplifies cross-border transactions. The global cryptocurrency market is estimated to be valued at US$ 37.9 billion in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the cryptocurrency market are Bitmain Technologies Ltd. (Beijing, China). The growing demand for cryptocurrencies stems from increasing investments in blockchain technology by financial institutions and retailers. Major companies are exploring ways to integrate cryptocurrency payments on their platforms to engage crypto-users. Geographically, North America dominates the cryptocurrency market owing to strong government regulations for blockchain technology and presence of key industry players in the region. The growing interest of investors in Asia-Pacific is also fueling the expansion of the cryptocurrency market.
The cryptocurrency market is witnessing strong growth in demand driven by increasing retail and institutional investments. Research shows over 300 million people globally own some form of cryptocurrency. The market received a boost during the Covid-19 pandemic as more people adopted digital and contactless forms of payments. Additionally, emergence of cryptocurrencies with real-world utility through decentralized finance applications is positively influencing the market.
Geographically, North America has emerged as the biggest cryptocurrency market due to presence of financial hubs like New York and major technology companies supporting blockchain innovation. Meanwhile, the Asia Pacific region is witnessing fastest growth in the adoption of cryptocurrencies led by strong growth in retail participation in China and India. Countries like Japan and South Korea have also embraced virtual currencies and established clear regulatory frameworks to encourage related businesses.
Market Key Trends
The increasing integration of cryptocurrency and blockchain capabilities across industries is one of the key trends in the market. Major technology giants like Microsoft, IBM, and SAP are proactively working towards developing blockchain applications for supply chain, finance, and digital identity management. This is broadening the scope of blockchain technology beyond just payments. Another major trend is the growing institutional participation in cryptocurrency exchanges. Large investment funds and asset managers are entering the fray and providing their client exposure to digital currencies. This is poised to bring more transparency and maturity to the largely unregulated cryptocurrency market space.
Porter’s Analysis
Threat of new entrants: Cryptocurrency market has low barriers to entry and high potential for new entrants, specially regarding new digital asset creation through blockchain. However, established players have advantages of existing infrastructure, brand recognition and customer base.
Bargaining power of buyers: Buyers have moderate bargaining power due to availability of various cryptocurrency options and exchanges. However, established cryptocurrencies like Bitcoin have strong brand value and liquidity.
Bargaining power of suppliers: Miners and hardware manufacturers have moderate bargaining power over cryptocurrency exchanges and platforms due to specialized skills required and investment in infrastructure for mining.
Threat of new substitutes: Threat of substitution is high as new cryptocurrencies or blockchain platforms can disrupt existing ones. Moreover, centralized stablecoins and CBDCs present substitution threats.
Competitive rivalry: Rivalry is high among top cryptocurrencies and exchanges to gain market share. Players compete based on technology, acceptance network, transaction speed and fees.
Geographical Regions
In terms of value, around 40% of total cryptocurrency market is concentrated in North America led by US due to early adoption, investments and regulatory clarity. Around 30% share is held by Asia Pacific region with countries like China, Japan, South Korea being major contributors.
The fastest growing region for cryptocurrency market is expected to be Asia Pacific at a CAGR of around 18% during forecast period. Countries like India and Southeast Asian nations are witnessing rapid digitalization and young tech-savvy population are major demand drivers in the region for cryptocurrency. Adoption of blockchain across industries would further boost cryptocurrency usage.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
