The Prospectives For Bitcoin Adoption Within The Next 5 Years
A close look at the bitcoin market reveals just how much cryptocurrencies have grown. Today, the value of cryptocurrencies has hit almost $0.3 trillion, and bitcoin is now the 7th largest currency in circulation globally. This is phenomenal considering that cryptocurrencies are barely a decade old.
This astronomical growth of cryptocurrencies begs the question. Just how much can cryptocurrencies keep growing? How is the adoption looking like in the world of cryptocurrencies? What are the prospectives of bitcoin adoption for the next 5 years?
Current Adoption Rate of Bitcoin Globally
Bitcoin’s position as the largest cryptocurrency by market capitalization is made possible by its global adoption. It is the most popular cryptocurrency both in terms of acceptance and general public recognition.
Currently, there are more than 52 million bitcoin users globally. This marks a more than 500% growth compared to the 8 million users at the end of quarter 3 of 2016. In just a little under 4 years, Bitcoin has seen 44 million new users sign up and own a cryptocurrency wallet.
While not all the 52 million users are actively involved in bitcoin trading and other transactions, the adoption rate of the cryptocurrency globally is exceptional and promises a very bright future for cryptocurrencies.
Before forecasting what would the numbers be in 2025, let’s take a quick look at the factors which affect the adoption rate of bitcoin.
Factors Affecting The Adoption Rate of Bitcoin
The levels of banking literacy and general literacy levels of the public affect how fast the citizens are likely to adopt new technologies. Areas with high levels of illiteracy have very low rates of adoption because of a lack of knowledge and resources.
Failure Of Traditional Banking Systems
One of the reasons why bitcoin has flourished is the general public’s loss of confidence in traditional banking systems. Bitcoin flourishes in areas where the public has a lot of distrust in the existing financial systems.
Bitcoin promises decentralization and more anonymous financial transactions. This appeals to the demographic which has suffered under central regulatory bodies for far too long. This explains why countries such as Russia, China, and Ukraine top the charts of the fastest adopters of bitcoin.
Support By Existing Financial Bodies
The adoption of bitcoin is highest in areas with well-established financial systems and sound regulatory bodies. Areas with well-established financial systems are more likely to incorporate alternative financial technologies.
This explains why Bitcoin adoption is great in developed countries and the rate is awful in third-world countries. From the bitcoin adoption rate index, countries like Ukraine, Russia, China, and the United States have excellent bitcoin incorporation while countries such as Afghanistan, Zimbabwe, and Libya have the lowest adoption rates.
Politics plays a key role in the adoption of cryptocurrencies. Some countries have politicized the adoption of cryptocurrencies into the mainstream financial systems. This has affected the rates of adoption of cryptocurrencies in these countries.
Countries like China which initially banned ICOs, Zimbabwe, Fiji, Libya, and Afghanistan have a low adoption rate for bitcoin partly because of the political influence in these countries. Without proper governance and political stability, bitcoin can’t grow.
Cryptocurrency adoption is great in areas rife with financial crimes such as money laundering. A lot of criminals believed that cryptocurrencies are a haven to conduct their unscrupulous businesses and they rushed to get wallets.
This explains why areas with high cases of money laundering, electronic crime, and other financial violations have a great adoption rate for bitcoin. This explains why countries like India, Nigeria, and Kenya top the lists of the countries with high bitcoin adoption rates. These countries are rife with online scams and money laundering and they use cryptocurrencies to try and cover their tracks.
The Prospectives For Bitcoin Adoption
Now that we have seen the current numbers and factors behind them, what are the projections for bitcoin adoption within the next 5 years?
While given the unstable nature of cryptocurrencies, it is impossible to tell the exact numbers, experts have an idea of how cryptocurrencies may look like in 2025. If the adoption rate follows the current curve which is adding about 10 million new users per year, then the number of bitcoin users will surpass the 100 million mark by the end of 2025. This would become true if all the conditions are ideal and there is no financial crisis along the way.
Experts estimate that the peak adoption of Bitcoin will be in 2030 when more than half the world population will have made a transaction with Bitcoin.
How We Can Accelerate Bitcoin Adoption
There are several ways via which the bitcoin community can accelerate the adoption of the cryptocurrency:
- Partnerships with corporates – Bitcoin should partner with corporates around the world to lure them into using bitcoin as the primary currency. If all the major retail outlets and multinational companies start actively using BTC, then its global adoption rate would be significantly improved.
- Education of the masses – There are millions of people who still not aware of cryptocurrencies. Mass education and sensitization programs would help educate these people about cryptocurrencies and encourage them to use digital money.
- Political stability – Without political stability, global cryptocurrency adoption will remain a dream. Political stability, especially in war-torn countries, will accelerate the adoption of bitcoin and other cryptocurrencies.
If the current growth rate of bitcoin is anything to go by, then the prospects of bitcoin in the next 5 years are good. We can expect more people to start using bitcoin for their daily transactions.
If you are a business or an individual and you haven’t incorporated bitcoin into your financial operations, then time is catching up on you and you should hop on the cryptocurrency bandwagon now.