Crypto.com raised its eyebrows last week when it announced that the number of cryptocurrency users worldwide could reach 1 billion by the end of 2022.

The timing was exciting given that Bitcoin (BTC) and many other cryptocurrencies are entangled in one of the largest (albeit short) recessions in their history and with the possibility of a tightening of interest rates by the US Federal Reserve.

But the cryptocurrency exchange, which in November named the arena where the Los Angeles Lakers basketball team plays under a 20-year contract, is clearly looking ahead.

In addition, his expectations depended on two developmental features: one in the “developed” world and the other in less mature national economies. It also included some statistical extrapolation. The main arguments for a big crypto leap forward are:

Crypto.com expects the developed countries of the world to create a “clear legal and fiscal framework.”
“Several countries facing hyperinflation and devaluing economies can accept cryptocurrencies as legal tender, such as El Salvador.”
Regarding extrapolation, the company stated: “In 2021, the number of holders of cryptocurrencies in the world almost tripled, from 106 million in January to 295 million in December. If we extrapolate a similar growth rate in 2022, we could reach 11 billion users of cryptocurrency by the end of 2022. ”

But is 1 billion cryptocurrency users really possible by the end of the year, especially given the 50% drop in market price from the beginning of November?

There are probably good secular reasons, including demographics, for believing that adoption will continue to grow exponentially. But will other countries really follow El Salvador’s leadership, given that the country’s BTC investment is currently under water, and if so, who could be next?

Finally, what, if anything, can stand in the way of the steady and growing bias in global cryptocurrency adoption, which according to Crypto.com currently accounts for 3.83% of the world’s population?

generation gap
Nigel Green, CEO of deVere Group, sees nothing out of the ordinary in this forecast. “There is every reason to believe that this may be true,” he told the Cointelegraph when asked about the stock market’s prospects, largely due to the “snowball effect of mass adoption and increased understanding and interest in cryptocurrencies.”

– It has to do with demography. Young people are more likely to use crypto than the older generation, and we are on the way to a major welfare shift. This is where baby boomers will transfer around $ 40-68 trillion to millennials. ” .
Others confirm this generational reality. Wharton School professor Jeremy Siegel recently said: “Let’s face it, Bitcoin has replaced gold as the hedge of inflation in the minds of many young investors. Digital currencies are the new gold for millennials.”

Yu Xiong, professor of business intelligence and director of the Center for Innovation and Marketing at the University of Surrey, told the Cointelegraph that the number of crypto-investors worldwide is “still very small” in the big picture.

Crypto.com’s methodology for counting crypto users is stricter than most users, but the 300 million current users are still at a higher level, and “there is a great potential for more people to get involved and add value.” Chung said, “I saw a lot of new students.” They buy cryptocurrencies »last year.

Xiong believes that global unrest, both political and economic, should encourage adoption. “We are facing increasing uncertainty in the world, such as what is happening in Russia, Ukraine and Taiwan.” People are seeing rising inflation in Turkey and other countries. Under such conditions, “it is unlikely that the value of bitcoin will not rise.”

But is this really the right thing to do? Last week, the International Monetary Fund called on El Salvador to reverse its decision to issue legal tender for bitcoin, citing concerns over “financial stability, financial integrity and consumer protection.” Elsewhere, Jeffrey Frankel, a professor at Harvard’s Kennedy School, stated that “El Salvador’s acceptance of bitcoin as a legal tender is pure folly” – largely because of BTC price volatility.

On January 6, 2022, however, a research report from Fidelity Digital Assets (FDA) came to a different conclusion than El Salvador’s experience, with the FDA stating that it “will not be surprised to see sovereign nation states acquire bitcoin in 2022 and possibly for as long the bank does not want to see Central make an acquisition. ”

Source: CoinTelegraph

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