State of crypto adoption in 2024

‍What we mean by crypto adoption

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"Crypto adoption" refers to the increasing use and acceptance of cryptocurrencies in various sectors of society. This can take place across different levels and areas, including:

Individual Level:

• Owning cryptocurrencies: This is the most basic level, where individuals hold cryptocurrencies like Bitcoin or Ethereum in their wallets.
• Using cryptocurrencies for payments: This involves spending crypto at merchants that accept it for goods and services.
• Using crypto for investments: Individuals might invest in cryptocurrencies for potential future appreciation or participate in DeFi (decentralized finance) applications.

Institutional Level:

• Businesses accepting crypto payments: Companies adopting crypto as a payment method, either directly or through third-party processors.
• Financial institutions offering crypto-related services: Banks and other institutions offering custody, trading, or investment products for cryptocurrencies.
• Governments recognizing or regulating crypto: Countries acknowledging crypto's existence and potentially creating regulatory frameworks for its use.

Overall Ecosystem:

• Growth in the number of crypto users and projects: Increasing development activity and participation in the crypto ecosystem.
• Expansion of infrastructure and applications: Building more robust blockchain networks, wallets, and decentralized applications (dApps).
• Integration with traditional financial systems: Bridges and solutions enabling interoperability between crypto and traditional finance.

However, it's important to note that crypto adoption is not a straightforward, linear process. Several factors can influence it, including:

• Volatility and understanding: The inherent price volatility of cryptocurrencies can deter some users. Additionally, not everyone fully understands the technology and its implications.
• Regulations and legality: The regulatory landscape surrounding crypto is still evolving, creating uncertainty for businesses and individuals.
• Security and scams: Security breaches and scams related to crypto can erode trust and hinder adoption.

Despite these challenges, crypto adoption has been steadily increasing in recent years, particularly in developing economies and with younger generations. As the technology matures and addresses challenges, its wider acceptance might continue to grow.

2023 recapped

While 2023 saw continued interest in crypto, it's important to consider that "mainstream adoption" remains a complex and ongoing process. Here are some examples of notable developments suggesting progress, but also highlighting the nuances:

Increased acceptance by retailers:

• Major companies like Starbucks, Home Depot, and PayPal began accepting Bitcoin or other cryptocurrencies for limited purchases.
• Payment processors like Visa and Mastercard expanded their crypto services.

Institutional recognition:

• BlackRock, the world's largest asset manager, created a working group to explore crypto asset exposure for its clients.
• Major banks like Goldman Sachs and Morgan Stanley offered crypto investment products to qualified clients.

Development of infrastructure:

• Ethereum underwent a major upgrade ("the Merge") aimed at improving scalability and sustainability.
• Layer 2 solutions like Polygon gained traction, offering faster and cheaper transactions on top of existing blockchains.

Other notable events:

• El Salvador became the first country to adopt Bitcoin as legal tender (though implementation faced challenges).
• The NBA partnered with the blockchain platform Crypto.com for a sponsorship deal.

However, it's crucial to acknowledge counterpoints:

• The FTX collapse in late 2022 negatively impacted public trust and market sentiment.
• Regulatory frameworks remain unclear in many regions, posing hurdles for wider adoption.
• Crypto scams and security breaches continued to occur, raising concerns about consumer protection.

Therefore, while 2023 saw positive steps towards mainstream adoption, it's essential to view them within a broader context. Crypto still faces challenges, and its complete integration into the mainstream remains an ongoing journey.

Crypto adoption in early 2024

Bitcoin ETF approvals in January

The first spot Bitcoin ETF was approved in the United States in January 2024, after years of anticipation. This allows investors to directly invest in Bitcoin through a traditional exchange-traded fund, similar to how they would invest in stocks or bonds.

The approval was seen as a major milestone for Bitcoin and could potentially lead to wider institutional adoption of the cryptocurrency. However, it is important to note that the ETF only tracks the price of Bitcoin, and does not give investors direct ownership of the cryptocurrency itself.

Ethereum spot ETFs

The approval of Ethereum spot ETFs is still pending in the United States. The SEC has yet to make a decision on several applications, and it is unclear when or if they will be approved. That being said, the deadline for the applications to be approved is in May.

They could potentially have a similar impact on Ethereum as Bitcoin spot ETFs had on Bitcoin.

Bitcoin Halving

The next Bitcoin halving is expected to occur in May 2024. This is an event that occurs approximately every four years, where the block reward for mining Bitcoin is cut in half.

The halving is often seen as a bullish event for Bitcoin, as it reduces the supply of new Bitcoins entering the market. However, it is important to note that the halving has not always led to immediate price increases in the past.

These are just some of the major cryptocurrency-related events that are expected to happen in 2024. The cryptocurrency market is constantly evolving, and it is difficult to predict what the future holds. However, these events could have a significant impact on the price and adoption of cryptocurrencies in the coming year.

Both the ETFs and the halving event are likely to increase the widespread adoption of crypto, perhaps dramatically. 

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