Cryptocurrency Market | Contrive Datum Insights

Market Overview:

The Global Cryptocurrency Market Was Valued At USD 4.25 Billion In 2022 And Is Expected To Expand At USD 10.67 Billion By 2030 With CAGR Of 12.2% From 2023 To 2030.

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Cryptocurrency is a digital asset that uses encryption to make and send money in the form of currency units without the need for a central bank or government. The system uses a technology called a "decentralized distributed ledger" to set rules and regulations for money transfers and other transactions. This banking system offers the user a low-cost and efficient payment method that eliminates the need for third-party verification and processing time.

The cryptocurrency market is likely to be greatly affected by new AI developments. AI-based cryptocurrency platforms are becoming more and more popular, which has led a number of companies to focus on making AI technology. For example, in August 2021, scientists at Los Alamos National Laboratory made a program that uses artificial intelligence to find illegal cryptocurrency miners who use computers in the lab to mine cryptocurrency.

Also, private venture companies are investing in the market because of the rise of cryptocurrency as a decentralised asset class. In 2021, for instance, USD 6.1 billion was put into 106 different deals on the U.S. cryptocurrency market. The growth is also helped by the fact that more people in countries like Iran, Argentina, and Zimbabwe, whose currencies have lost value, want to use cryptocurrency as an alternative way to pay.

COVID-19 Impact:

The COVID-19 pandemic has had a huge impact on the global economy. Since the virus spread to 188 countries, many businesses had to close and a lot of people lost their jobs.

The virus mostly affected small businesses, but large corporations felt the impact as well. Apple closed all of its stores outside of China temporarily and Bloomingdale’s did the same with all of its 56 locations. Against the backdrop of the uncertainty raised by COVID-19, Bitcoin, Ethereum, and other digital currencies have garnered significant attention. Even banks have started buying crypto for the first time.

Banks in the US are creating their own blockchain-based systems, including digital currencies, to enable B2B cryptocurrency payments between their customers. Also, in October 2020, PayPal announced that its customers will be able to buy, sell, and hold Bitcoin and cryptocurrencies using their PayPal accounts, allowing customers to buy things from the 26 million sellers who accept PayPal, in 2021, PayPal is planning to allow cryptocurrency to be used as a funding source.

Market Dynamics:

Market Trends:

• Growing Adoption of Digital Currencies will have Profound Impact on the Market

The popularity of virtual or digital currency such as Bitcoins, Litecoins, Ethers, and many more are expected to drive the market in the forthcoming years. People from developed countries are likely to adopt the easy and flexible transactional method offered by digital currency. This popularity of virtual currency as an exchanging medium led the central bank to support digital currency. The central bank patented Central Bank Digital Currency (CBDC) activity provisions for the digital currency projects across many developed countries. For instance, the Bank of Thailand and Central Bank of Uruguay are applying the toolkit to its CBDC evaluation process; the Eastern Caribbean Central Bank and People’s Bank of China also support CBDC for adopting digital cash as an exchange medium. Several companies, such as Facebook, Inc., are expanding their business by offering digital money. For instance, in June 2019, Facebook, Inc. launched a digital currency named Libra. Libra will enable customers to buy things or send money to others and cash out Libra online or at grocery shops. Additionally, companies can benefit from fluctuating digital currency prices and strengthen their digital assets.

Driving Factors:

• Focus on Mitigating Financial Crisis, and Regional Instability Drives the Virtual Currency’s Demand

Financial disaster is a major issue occurring in traditional banking and the financial sector. Financial uncertainty disturbs the economy by dropping the value of the currency. For instance, India’s ICICI bank had majorly confronted the Lehman brother crisis in 2008, which affected the nation’s economy. With Bitcoins or other cryptocurrencies, there is no major effect of the financial crisis on it as its value is balanced universally. Cryptocurrencies are better options in financial uncertainty for the regions with unstable economical structures, which is becoming a major market driving factor for the market.

• Increasing Adoption of Bitcoin to Witness Exponential Demand for Cryptocurrency Market

Bitcoin is one of the most popular and majorly adopted digital cash across the world. The rising visibility, growing interest of investors, and supporting regulations are further augmenting the market's growth. Maturing bitcoin cash value and the facility to offer rewards for transactions are also upsurging digital cash’s market value. Developing countries like Japan, the U.S., European countries, and many more indicate people's inclination towards digital currency, which is expected to facilitate the cryptocurrency market growth in upcoming years.

• Easy Accessibility of Cryptocurrencies

The ease of accessing and purchasing cryptocurrency is expected to drive market growth. To earn bitcoins, the customer only needs to download a wallet, add money, and scan with their phone. There are numerous ways to purchase the currency; for example, online exchanges such as coin base and Kraken offer such services. Various groups' increasing technological familiarity and efforts to make the general public familiar with new technology are expected to drive market growth.

Restraining Factors:

• Uncertain Regulatory Status

The cryptocurrency market is not yet regulated. At present, the lack of regulations and the uncertainty regarding the same are among the major factors restraining the adoption of cryptocurrencies.

While financial regulatory bodies across the world are working to find common standards for cryptocurrencies, regulatory acceptance remains one of the biggest challenges. As the distributed ledger technology is still in the nascent stage, it raises a number of questions for regulators and policymakers at national and international levels.

• Misuse of Virtual Currency and Security Attacks Confines the Adoption of Cryptocurrencies

As virtual currencies are an unauthorized, decentralized, and uncontrollable exchanging platform, many regulators are worried about the increasing misuse of these currencies by criminals for illegal activities. It has been seen that many unlawful activities like tax evasion, money laundering, and terrorist financing have been carried out by criminals using digital money. In July 2019, Treasury Secretary Steven Mnuchin shared their concerns about the misuse of Facebook, Inc.'s patented Libra digital currency by terrorist financiers and money launderers. Moreover, growing security concerns and cyber-attacks have led to the loss of the invested currencies, limiting the adoption of cryptocurrencies. For instance, In February 2020, digital currency exchange platforms of Okex.Com and Bitfinex companies were disrupted with Denial of Service attacks. Such security concerns and misuse of digital currencies become a major restraining factor for the industry’s growth.

Criminals and terrorists are more inclined to deal in cash and keep cash as collateral than to use financial intermediaries such as banks and avoid anti-money laundering reporting and compliance regulations. Businesses and governments became worried that the pseudonymous and decentralized nature of digital currency transfers might offer a way for criminals to conceal their financial activities from the authorities. For instance, Bitcoin was used on the web-based, illegal drug market called Silk Road. This exchange and Bitcoin escrow program allowed more than 100,000 illegal product transactions from about January 2011 until October 2013, when the government shut down the company and detained persons operating the platform.

Criminal usage of virtual currencies would not automatically mean that blockchain is a net negative for the community since its advantages may outweigh the social expense of increased criminality enabled by virtual currency. Law enforcement agencies have the potential to minimize the usage of digital currencies to prevent law enforcement. In addition to the ability of law enforcement to prosecute violence, the government has the right to restrict digital currency exchanges to legislation relating to the monitoring of criminal behavior.

Opportunities:

• Significant Growth Opportunities in Emerging and Developed Markets

Emerging economies (such as India, China, and Brazil) and developed countries (such as the US, Germany, and Japan) are expected to offer significant growth opportunities for companies operating in the cryptocurrency market.

For instance, in 2020, Brazilian crypto companies have signed a code of self-regulation that aims to legitimize and boost the adoption of crypto assets in the country. The document was signed under the auspices of Abcripto, the country’s association of cryptocurrency companies.

The objective of the agreement is to establish operational practices and compliance standards that all members must adhere to. The country’s prominent cryptocurrency firms that signed the code include Foxbit, Ripio, Bitcoin Market, and Novadax.

Challenges:

• Concerns Regarding Security, Privacy, and Control

Cryptocurrency has the potential of transforming and revolutionizing compliance-free peer-to-peer and remittance transactions; however, end users have to overcome certain challenges related to security, privacy, and control to benefit from cryptocurrency.

Since cryptocurrency transactions are recorded in blockchain, a distributed public ledger, hackers have a lot of ways to get to important and sensitive information. If this public ledger is used to store private information about contracts or payments, making copies of the file could make it easier for hackers to get to that information. If a key falls into the wrong hands, it can be used to get into the database in both hub-and-spoke and distributed models.

Strategic Development:

• In January 2020 - Binance.com bought the Indian Bitcoin exchange WazirX, which was based in Mumbai. With this purchase, Binance.com is putting a lot of focus on growing its business in India. Binance.com patented the Fiat Gateway platform, and WazirX's peer-to-peer (P2P) engine will be added to make it easier for Binance.com users to buy Tether or USDT and trade digital currency on the site.
• In March 2021 - Visa Inc. processed cryptocurrency payments directly on the Ethereum Blockchain and plans to offer it as a new payment service. With this key project, the company wants to get the finance industry to accept cryptocurrencies as a way to pay.
• In March 2018 - NVIDIA announced a set of new technologies and partnerships that increase its potential inference market to 30 million hyperscale servers around the world and drastically lower the cost of delivering deep learning-based services.
• In February 2018 - AMD released the EPYC Embedded 3000 series processor and the AMD Ryzen Embedded V1000 processor. These processors offer high performance, great integration, and security right on the chip.
• In June 2021 - NYDIG, a company that manages digital assets, teamed up with NCR Corporation to make it possible for credit unions and 650 banks to buy cryptocurrency. This is being done because NCR Bank customers who bought digital money through third-party exchanges asked for it.

Key Vendors:

Top market players are

• Bitmain Technologies Ltd. (Beijing, China)

Bitmain Technologies Limited works as a bitcoin miner and makes ASIC (application specific integrated circuit) chips. The Company operates mining pool platforms, cloud computing platforms, blockchain financial providers, and service platforms. Bitmain Technologies has clients all over the world.

• Xilinx, Inc. (California, U.S.)

Xilinx was started in 1984 in Silicon Valley. It was the company that came up with the FPGA and the Adaptive SoC. Silicon made by Xilinx that was very flexible and could be programmed, along with a set of advanced software and tools, sped up innovation in a wide range of industries and technologies. Xilinx made the most flexible processing technology in the industry, which made it possible for new ideas to be made quickly.

• Intel Corporation (California, U.S.)

Intel's goal is to shape the future of technology so that everyone can have a better future. Intel's work is at the heart of many new ideas because it pushes forward in fields like AI, analytics, and cloud-to-edge technology.

• Advanced Micro Devices, Inc. (California, U.S.)

Advanced Micro Devices, Inc. (AMD) is one of the biggest companies in the world when it comes to making microprocessors. It is second only to Intel Corporation. Even though AMD's 10 percent of the market is small compared to Intel's 80 percent, the Sunnyvale, California-based company is seen as a tough rival. AMD is considered especially strong as a supplier to the low-end PC market, where it commands a nearly 60 percent share.

• Ripple Labs, Inc. (California, U.S.)

Ripple Labs Inc. operates as an enterprise blockchain company. The Company offers an open source payment system and a math-based virtual currency that powers distributed currency exchange, merchant payments, money transfers, and remittances. Ripple Labs serves customers worldwide.

• Bitfury Group Limited. (Amsterdam, U.K.)

The Bitfury Group is the world’s leading full-service blockchain technology company. Bitfury uses the most important technologies of the millennium to build solutions for the future. Our goal is to make the world more open and trustworthy by coming up with new ideas at every level of technology, including hardware, security, and software.

• Ledger SAS (Paris, France)

Ledger operates as a software company. The Company develops security and infrastructure solutions for cryptocurrencies as well as blockchain applications for individuals and companies. Ledger serves customers in France.

• Nvidia Corporation (California, U.S.)

NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company's creation of the GPU in 1999 helped the PC gaming market grow, changed the way computer graphics were made, started the age of modern AI, and is now helping to make the metaverse. NVIDIA is now a full-stack computing company with data-center-scale offerings that are reshaping industry.

• BitGo (California, U.S.)

Bitgo, Inc. runs a platform for security-as-a-service. The company makes it possible for exchanges, marketplaces, and e-commerce players to make transactions between more than two parties safe and easy.

Segmentation Analysis:

The market is segmented on the basis of component, type, hardware, software, end-use and region.

By Component Outlook:

The global market has been split into software and hardware based on the parts.

The hardware segment is further classified based on platform types as Graphical Processing Unit (GPU), Field Programmable Gate Array (FPGA), Application Specific Integrated Circuit (ASIC), and others. The hardware segment comprises hardware implemented for crypto mining and exchange such as Bitmain Antminer S9i, Halong Mining DragonMint T1, Pangolin Whatsminer M3X, Avalon6, among others. ASIC mining hardware is expected to have the largest share, mostly because it mines a specific coin quickly and well.

The software segment is further categorized into mining software, exchange software, payment, wallet, and others. BeMine, ECOS, Shamining, CCG Mining, and many other programs are examples of crypto software. Exchange software uses a trading engine that is a single interface for connecting offers and exchanges with digital currency derivatives. The platform is used to match, sell and buy from users, thereby holding the largest share in the market. The global market is likely to be driven by the wide range of exchange platforms. Whereas, wallets can be hardware or software wallets. Most people use software wallets or digital wallets because they make people feel safer. Digital wallets are again put into two groups, self-hosted and custodial, based on how much control the user has over the private key protection function.

• Hardware
• Software

By Type Outlook:

In 2022, the bitcoin segment led the market and made up more than 36.0% of the world's revenue. During the time frame of the forecast, this segment is expected to grow at the fastest rate. Bitcoin is a virtual currency that can be used as an alternative way to pay that doesn't involve a central bank. During the forecast period, the number of Bitcoin Exchange Traded Funds (ETFs) is expected to drive up the number of Bitcoin trades around the world. For example, in May 2022, USD 207 million came into the Purse Bitcoin ETF in Canada. This was the most money that came in.

During the period of the projection, the Ethereum segment is expected to grow a lot. Ethereum is a piece of open software that lets users build a wide range of decentralized apps. Because there are so many new projects that use the Ethereum network, there has been a big increase in network traffic. This is directly related to the growth of the Ethereum market.

With Ethereum, smart contracts were first used for algorithm-based financial transactions. Smart contracts are written instructions for how to handle transactions on the blockchain network. As Ethereum moves to Ethereum 2.0, which uses less energy and costs less to mine, the first-mover advantage should help the cryptocurrency grow over the next few years.

• Bitcoin
• Bitcoin Cash
• Ethereum
• Litecoin
• Ripple
• Others

By Hardware:

In 2022, the market was led by application-specific integrated circuits, which made up more than 43.0% of global revenue. Application-Specific Integrated Circuits (ASICs) are electronic circuits that are made to mine virtual currencies like Bitcoin, Litecoin, and Ethereum. As the need for cryptocurrency mining devices that use less energy grows, more and more companies are turning to ASIC miners. ASIC also needs less maintenance and uses energy more efficiently, which is expected to help the segment grow.

During the forecast period, the Graphics Processing Unit (GPU) segment is expected to grow at a good CAGR. This growth is because more and more people are using GPUs to mine cryptocurrency because they are fast and use less power. Several crypto miners are told to think about using GPUs to mine crypto. Jon Peddie Research Inc., a company that keeps track of trends in the computer industry, says that 25.0% of GPUs sold in the first quarter of 2021 were to people who mined cryptocurrencies.

• Central Processing Unit
• Graphics Processing Unit
• Application-Specific Integrated Circuit
• Field Programmable Gate Array

By Software:

In 2022, exchange software was the most important part of the market and made up more than 32.0% of the global revenue. For cryptocurrency transactions to go through, you must use exchange software, which makes it easy to change cryptocurrency coins into fiat currencies and vice versa. The growth of the segment is likely to be helped by the fact that more and more software is being made to make trading cryptocurrency easier.

During the forecast period, the wallet segment is expected to grow at a faster rate. The segment is growing because more people are using cryptocurrency wallets, which give people online tools to manage and store blockchain assets and cryptocurrencies in a safe way. Several multi-asset cryptocurrency wallets make it possible to store and trade different cryptocurrencies, such as Bitcoin, Litecoin, and Ethereum.

Also, a number of companies that offer services for cryptocurrency wallets are focusing on making crypto wallets that let users send and receive cryptocurrencies through mobile apps. For example, in January 2022, Robin Hood, a service provider for cryptocurrency wallets, launched the beta version of its upcoming cryptocurrency wallets. The wallet is made so that customers can use the Robin Hood app to trade, send, and receive cryptocurrencies.

• Mining Software
• Exchange Software
• Wallet
• Payment
• Others

By End-User:

In 2022, the trading segment was the most important part of the market and made up more than 28.0% of the global revenue. When people trade in cryptocurrencies, they can buy, sell, check their asset balances, and get deposit addresses. Several companies that make browser technology are focusing on making partnerships with companies that make blockchain technology so that their clients can trade cryptocurrency more easily. During the forecast period, the retail and e-commerce segment is expected to grow at a good CAGR. One of the main things driving the growth of the segment is the growing number of brick-and-mortar and online stores that accept cryptocurrencies as a valid form of payment. Several companies that handle cryptocurrency payments are forming strategic partnerships with e-commerce companies to make it easier for people to pay with digital currencies.

• Banking
• Gaming
• Government
• Healthcare
• Retail & E-commerce
• Trading
• Others

Regional Insights:

North America had the most of the world's market in 2020. This was because most countries in North America did not tax bitcoins as money, but as a way to trade goods. Even though there are no laws about digital money, it is still used in many developed countries. The market is growing because both buyers and sellers are willing to take digital cash. Also, a few big players control the market in North America, and bitcoin mining is popular.
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The Asia-Pacific market is also expected to get a big boost from a number of technological changes and the fact that some platforms in Japan and Taiwan will accept virtual currency. Strategic partnerships and collaborations between key players also help the market in Asia and the Pacific. For example, in January 2020, Z Corporation, Inc. and TaoTao, Inc. said they would work with the financial service agency to grow the crypto market by making sure regulations are followed in the Japanese market. Japan recently agreed to use a new way to exchange digital money because of the COVID-19 virus. In the same way, Malaysia's Securities Commission has given digital currency exchange operators legal permission to work in the country, even though the whole country is on lockdown because of the coronavirus pandemic. In some economies, the spread of COVID-19 could help this market grow.

A lot of European, Middle Eastern, and African (MEA) countries are also showing how they could use cryptocurrencies. Europe, the Middle East, and Africa are also expected to grow quickly during the time frame of the forecast.

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• France
• Italy
• Spain
• UK
• Nordic Countries
• Denmark
• Finland
• Iceland
• Sweden
• Norway
• Benelux Union
• Belgium
• The Netherlands
• Luxembourg
• Rest of Europe
• Asia-Pacific
• Japan
• China
• India
• Australia
• South Korea
• Southeast Asia
• Indonesia
• Thailand
• Malaysia
• Singapore
• Rest of Southeast Asia
• Rest of Asia-Pacific
• The Middle East & Africa
• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest of the Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America

Scope of Report:

Conclusion:

• This report on the market is a deep look at the market. It focuses on important things like the top companies, the product industry, and the best software and hardware solutions for mining.
• Aside from this, the report shows how the cryptocurrency market is changing and highlights the most important changes in the industry.
• In addition to what has already been mentioned, the report covers a number of other important factors that have led to the growth of the market in recent years.