As such, the role of technology and a digital-centric approach is becoming prevalent. It has become clear that understanding the many factors that impact global crypto demand is critical for those in these industries. Check how blockchain technology can prove benefit for small businesses.
Factors affecting global crypto demand are as follows:
(1) Global Cryptocurrency Market Size:
Cryptocurrency market data has been collected since 2010, and the market size has grown exponentially. Several companies, such as Coinbase and Chain lysis, have issued cryptocurrency market data reports each year. This data shows that the size of the market and its growth patterns have fluctuated considerably. For example, in 2017, a rapid increase in the exchange of bitcoin for other cryptocurrencies caused a significant change in the overall crypto market share.
However, in 2018 blockchain technology has seen widespread adoption from retail investors and large financial institutions. As a result, it has resulted in a significant increase in the demand for a wide range of cryptocurrency services and products. In 2017, according to Coinbase data, U.S. investors bought 20 per cent of all bitcoins. This figure rose to 40 per cent by January 2018, with most of those investors being from Asia and the U.S., represented by Japan, China, India, and Turkey respectively.
(2) Number of Countries Supporting Cryptocurrencies:
As noted above, the demand for bitcoin has increased. A primary factor for this growth is the growing number of countries in which cryptocurrencies are being supported. According to Coinmarketcap data, as of October 2018, there were almost 1500 cryptocurrencies supported by over 4400 different markets around the world. This fact is significant because it indicates a growing global acceptance of cryptocurrency and blockchain technology.
(3) Regulatory Compliance:
Regulations have been introduced, and with them, new hurdles have been created for cryptocurrency exchanges, mining pools and exchanges dealing in fiat-to-cryptocurrency trading. In addition, it has led to the creation of more stringent procedures, which in some cases affect the legitimacy of ICOs and IPOs.
Such a change has made it more difficult for individuals to trade cryptocurrencies and create new ones easily. As such, at the start of 2018, there were still approximately 1000 exchanges that were not registered with governmental regulators. In addition, the cryptocurrency market is currently struggling with money laundering and fraud issues.
(4) Expected Impact on Businesses:
The process of digitizing businesses will continue to grow in 2022. Companies in several industries, including healthcare and retail, are currently transitioning to becoming more efficient, and this trend is projected to continue.
Technology has been touted as a revolutionary force in modern business practices, and with good reason. However, since it first gained popularity around 2015, blockchain technology may prove to be more than just a disruptive new technology; it could have the power to make many aspects of business processes more efficient.
The results from large corporations have demonstrated the potential for blockchain technology. For example, IBM recently reported that its blockchain-based food traceability system is seven times more efficient than previously available for specific suppliers and retailers. This improved efficiency will benefit those involved in food production, delivery, and retail. In addition, many corporations are starting to use technology as well. For example, food retailer Sainsbury’s recently partnered with IBM to implement the technology at eight U.K. stores.
(5) Population and Density Using Cryptocurrencies:
The global population is going through a boom in the number of millennials in their 20s and 30s. The growing demand for cryptocurrencies will be driven by millennials having more access to online digital platforms, such as Facebook and Google. Millennials are also more likely to have credit cards and much easier access to a bank account than previous generations.
They will likely have extra funds from which they can buy cryptocurrencies, especially if the price is low. In addition, the growing density of millennials in urban areas worldwide also means that there will be a more significant number of people who can purchase cryptocurrency regularly.
6. Supply of cryptocurrencies:
As of 28 October 2018, the total supply of active cryptocurrencies (in circulation and wallets) was approximately 1,715,000,000. It is a net increase from the supply of 1,534,412,108 as of 24 October 2018. The combined market of all cryptocurrencies grew roughly 2.4% over the past 24 hours or about $30 million. The three largest cryptocurrencies by market capitalization are all in the red for the day, with Bitcoin down 3% and Ethereum and Ripple posting declines of 2–5%.
7. Scarcity of cryptocurrencies:
The total supply of cryptocurrencies has been relatively stable, and there is slight individual variation in the amount of cryptocurrency held by all holders at any time. Cryptocurrencies, in general, have essentially four different types of scarcity—scarcity in terms of the supply or demand for a specific cryptocurrency; scarcity because of market capitalization, which depends on the public interest and importance of specific cryptocurrencies; scarcity due to being hard to create or obtain; and scarcity due to user experience.