Crypto.com: 1 Billion Cryptocurrency Users By The End Of 2022
Welcome to an industry that is going to triple in size over the next 12 months. This according to the latest report by Crypto.com detailing the last year in crypto along with their forecasts for 2022.
Most are aware that cryptocurrency is expanding at a massive rate. However, this forecast highlights precisely what pace we are moving at. Essentially, this means adoption is happening at about 3 times the pace of the Internet. Think about that for a moment.
To say that 2021 was a stunning year in cryptocurrency is an understatement. Yet, it appears this is going to be topped by the ensuing 12 months. This will be a wild ride for all involved.
300 Million Users
The report projects that the number of cryptocurrency users is around 300 million. This is up from the start of the year where there were just over 100 million.
As we can see, the number was 292 million on November 30th. That is a tripling of the user base, a mark which is expected again in 2022.
According to Crypto.com research, there were over 292 million crypto users worldwide as of 30 November 2021. Based on data by TripleA, more than 18,000 businesses are already accepting cryptocurrency payments. In particular, India (100M), the U.S. (27M) and Russia (17M) were the largest crypto population countries.
Now consider what things will look like when we see the total grow to 1 billion users. That is about 13% of the total global population and more than 20% of the online community.
In other words, we can expect another phase where we see massive growth.
GameFi Is The Path To Mass Adoption
It is no secret that online gaming is enormous. This is also one of the areas that aligns ideally with cryptocurrency. The gaming world is accustomed to using in-game tokens as well as owning digital assets. Where we see a drawback, presently, is none of that can transform outside the individual game. Cryptocurrency, specifically NFTs, is changing this.
For this reason, many, including the Crypto.com team, foresee gaming as the path to public adoption of cryptocurrency. It makes sense when we consider how many gamers there are.
According to this, we see the number at somewhere near 2.7 billion people play games online. That is about half of all Internet users. It means that we see a knowledgeable market that could easily adopt cryptocurrency. They are already using the basic mechanics of tokenization. Now it is just a matter of seeing that tied into blockchain.
Situations like this see new concepts spread like wildfire. The #play2earn idea could take hold very quickly. As more games roll out, offering higher quality than the first couple generations, the migration of users could be swift. This is where hundreds of millions of cryptocurrency users will suddenly enter this realm.
Big Money Players
Michael Saylor and Elon Musk get a lot of attention within the cryptocurrency community. However, on the grand scale, they are bit players. The real money is within the banking and financial institutions. There is where there trillions of dollars are located.
This year we saw some of the largest banks position themselves to benefit from cryptocurrency.
Here is a chart that shows the timeline of some of the best known financial institutions.
We know this is a process that will continue. At the same time, the size of the institutions is only going to increase. There are going to be pension funds and money managers with trillions under management who enter this arena. It is also likely sovereign wealth funds start to buy in (if they aren't already).
The point is we are going to see a lot more money rolling into this realm.
Another factor is the entrant of retail investment money. While the industry is made up most of that for the moment, holding cryptocurrency is still too complicated for most. This excludes it as an investment vehicle for the average person.
That will changes as different funds are established. Grayscale did well with its different trusts that were set up. However, that is not as common a vehicle as ETFs. In the United States, a number of Bitcoin futures ETFs were approved. So far, the SEC resisted an ETF based upon the spot price but that is likely to come in 2022. As other countries approve that, the U.S. is going to have no choice.
Here we will see the floodgates open where institutional and retirement money can flow in. This is an amount that is order of magnitudes higher than what most people have in terms of their basic investing monies. Accessing the retirement capital is a huge step forward.
Compounding Effect
Things are going to explode. There is no other way to capture what is going to happen. The numbers tell the story but only partially.
When we look at the raw data, a tripling looks like an impressive move. Certainly it is. However, that does not foretell the impact that all of this will have.
With cryptocurrency, we see a compounding at every layer. There is an interconnection that takes place. When one area benefits, the impact is felt elsewhere.
So far, we look at gaming, Decentralized Finance (DeFi), NFTs, and Decentralized Autonomous Organizations (DAOs) as separate concepts. They are discussed like they are individual sectors. The reality is that they are going to overlap and be intertwined with each other. That means any breakthroughs will have significantly greater impact than just upon the first area of focus.
Another 600M-700M people involved in cryptocurrency is going to create a situation where we things grow by an amount greater than a 3X.
Here is where the overlooked Reed's Law enters the picture.
The forming of groups (communities) is really going to create a network effect that surpasses what we saw before in the online world. While traditional social media did a fantastic job leveraging this concept, it is about to be taken to another level as communities also double as economies, containing a wide range of financial and social services. Entire businesses are going to be built and scale within the community, riding the same growth curve. The fact that anyone within the community can do this moves the effect much further out.
We know the digital world is not constrained by the same physical laws as the "real" world. Things move much quicker and can scale to a larger level. Dealing with bits is a lot easier than messing with atoms. It is why companies like Amazon and Facebook became so large in a relatively short period of time.
Cryptocurrency is entirely digital. All the concepts mentioned in here operate in this realm. Hence, the scalability and reach is much greater than what we saw in the past.
Adding another roughly 200 billion users to cryptocurrency is a major step forward. However, it is a level that will be far surpassed in 2022.
It is going to be a wild ride.
Let us know in the comment section what your forecasts are for the upcoming year with cryptocurrency.
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