According to MatrixPort, institutional interest and economic uncertainties are driving the fast global adoption of cryptocurrencies.
Global cryptocurrency adoption is nearing a major milestone, with 7.51% of the world’s population now using digital currencies, according to a report from MatrixPort.
The report anticipates that this figure will surpass 8% by 2025, indicating a potential transition of crypto from a niche sector to mainstream financial systems.
Institutional Influence on Global Adoption
The report emphasizes that increasing institutional interest is a key driver behind the steady rise in crypto adoption.
Traditional financial firms, such as BlackRock, have played a crucial role in fostering trust and legitimacy for digital assets within conventional financial frameworks.
Markus Thielen, founder of 10x Research, shared with Cointelegraph the importance of institutional products in the growth of Bitcoin and the wider crypto market:
“The evolution of Bitcoin has consistently driven price rallies whenever new layers of Bitcoin acquisition were introduced to financial markets […] The potential introduction of options based on Bitcoin spot ETFs could trigger another wave of institutional interest.”
Bitcoin’s Role in Economic Uncertainty
Bitcoin remains a central player in cryptocurrency adoption, often regarded as a store of value, especially in times of economic instability.
Thielen pointed out that economic difficulties have historically increased demand for Bitcoin, such as during the European debt crisis and the Chinese yuan’s devaluation.
Thielen also noted:
“[…] rising US debt levels could spark strong demand for Bitcoin if the economy faces a slowdown, whether from a recessionary period or trade wars. This trend positions Bitcoin as a hedge during times of economic uncertainty.”
Challenges to Crypto Adoption
Despite the optimistic forecasts in the MatrixPort report, challenges remain. These include regulatory issues, market volatility, and concerns about retail investor security.
Hacks and scams, like wallet drainers, continue to pose risks in the crypto space.
Additionally, institutional investors could amplify market volatility, as large sell-offs during macroeconomic shifts may destabilize the market.
