Cryptocurrencies are no longer perceived as a daring technological innovation and have become an integral element of the global financial system. However, geographically, the demand for this means of payment is uneven. Market indicators make it possible to identify entire regions that need to consider global cryptocurrency market development. In this article, we discuss the fastest-growing crypto markets.
Overview of global cryptocurrency adoption
Despite the restrictive measures of individual countries and the consequences of the COVID-19 pandemic, the global adoption of cryptocurrencies is moving by leaps and bounds. According to the payment solutions developer Triple-A, 562 million people use digital assets while their annual growth exceeded 30%.
The spread of cryptocurrencies is still stalled due to the slow development of the legislative framework in most countries. But even taking into account all the difficulties, digital assets are showing significant growth against traditional payment instruments.
Even though from the outside it may seem that the latter are limited in distribution this is not true. According to the World Bank, 21% of adults still do not have a bank account. Cryptocurrency can close this gap with the proliferation of easy-to-register and use applications for settlements and the growth of decentralized finance (DeFi). Actually, this process is already clearly visible in the example of developing countries, especially Latin America, Africa, and Asia, where the cryptocurrency market is growing visibly.
By all means, crypto is primarily a big business, and many countries already see the crypto market as an opportunity to attract finance and boost the economy. There are more and more crypto-friendly countries that motivate business leaders to open companies on their territory, creating the most convenient conditions for this. Thus, one can observe the movement of funds from one country to another. Consequently, the geography of the global cryptocurrency market is also changing.
Criteria for identifying fast-growing crypto markets
Experts categorize the global crypto market by components, end-user industry, type, applications, revenue, and geography.
- by components: hardware and software
The hardware segment is graphics processing unit (GPU), such as those made by Advanced Micro Devices (AMD) or Nvidia, field programmable gate array (FPGA), application specific integrated circuit (ASIC), and hardware implemented for crypto mining and exchange, such as Bitmain Antminer S9i, Halong Mining DragonMint T1, Pangolin Whatsminer M3X, Avalon6 and others.
The software segment includes mining software, exchange software, payment system and wallet category. Some examples - BeMine, ECOS, Shamining and CCG Mining. The trading mechanism producing alignment, sale and purchase on exchanges’ platforms for users occupies the largest market share.
- by end-user industry:
The market is categorized into different end-use segments, including trading, e-commerce and retail, peer-to-peer (p2p) payment, and remittance. The largest market share is occupied by trading. Pionex, Cryptohopper, Bitsgap and Coinrule are among the crypto solutions used for trading.
Online payments in cryptocurrency are widely used in developing countries and make up the majority of cross border remittances.
Peer-to-peer (p2p) payments allow users to make transactions without intermediaries. It’s ease of use, low fees and transparency make it the one of another significant application of crypto. This blockchain technology provides a reliable alternative for everyday transaction for economies with high inflation rates.
- by type: Bitcoin, Ether, Litecoin, Bitcoin Cash and others.
Bitcoin is a highly adopted digital currency in the market, and it will maintain its dominance over the coming years. Ether, a virtual currency that can be used for accounting, investing, and establishing smart contracts and decentralized applications, is another popular virtual currency on the market. And every other coin has its own application on the market and drives the cryptocurrency market growth.
Top fastest growing crypto markets by region
Asia-Pacific (APAC)
This region is experiencing a surge in cryptocurrency adoption driven by growing institutional acceptance and consumer interest in crypto as a whole and in newer sectors, such as play to earn (P2E). It is a leading region in such aspects as technological innovation, regulatory framework, and infrastructure development. The key players are Singapore and Hong Kong, which are distinguished by the benefits for investors. The UAE, with its strong emerging economy and high level of public acceptance of digital assets, is also part of the region. Notably, none of these three countries levy capital gains tax, which is undoubtedly a significant factor, especially for crypto investors and wealthy individuals.
The same region includes the western United States, the country with the largest capitalization of Bitcoin, a high concentration of miners, and stricter regulations.
Africa
In recent years, Africa has been the region with the fastest spread of cryptocurrencies in the world, but with a fairly high level of government control.
The limited availability of banking services in the sector contributes to the increasing adoption of blockchain technologies among the population. Due to the financial crisis in Ghana, Nigeria, Kenya and South Africa, residents of these countries are turning to "digital gold" as an alternative tool for saving and achieving greater financial freedom.
The top position among African countries by the crypto use is occupied by Nigeria. However, in February of this year, the country's regulators announced the closure of access to crypto trading platforms, limiting access to exchange traded coins, due to the opinion that crypto usage makes it difficult to stabilize the country's national economy.
The sector has good prospects for mining. So low electricity taxes have led to an influx of miners from China.
Latin America
The Latin American country of El Salvador was the first in the world to legalize Bitcoin (BTC) and make the coin the national currency. Broad regulatory support and consumer demand are driving the growth of Latin America's fintech sector. The main driver of the regional market, as is in Africa, is household payments of the population, which is also turning to digital currencies due to the financial crisis.
However, Brazil faces common difficulties in further introducing cryptocurrencies. The legislative structure is still being formed, and high volatility can have a negative impact on many traders and users. In addition, the country has a reliable banking, financial and technological infrastructure that competes with new blockchain-based solutions seeking to enter the global crypto market and attract users.
Eastern Europe
The leading players of the region are Russia and Ukraine. The use of cryptocurrency in these countries has grown after the events of February 2022. The population has become more likely to do cross border remittances in cryptocurrency due to rising inflation and restrictions on fiat currency transactions conducted through banks. Many foreign services have ceased to serve Russians, so Ukrainians are showing higher activity in terms of transfers. Ukraine received over $65 million in cryptocurrency donations.
Russia also has great opportunities for mining development, and already occupies a leading position in this market segment.
Middle East
From December 2024, the law "Crypto Asset Markets" will come into full force in the EU. The new legislation establishes standards for crypto asset service providers and cryptocurrency issuers. Issuers will be required to comply with standards for disclosure and transparency of information about issued crypto assets. Service providers can obtain a license in any of the 27 EU member states and do business there. They will also be required to counteract market manipulation, such as insider trading.
The law will not regulate those crypto assets that were previously recognized as financial instruments. It will also not apply to NFT.
In the meantime, the leading country in the segment is Switzerland, where CryptoValley is located in the low-tax canton of Zug. For example, the headquarters of the Ethereum Foundation and Cardano Foundations are located here. Other cities in Switzerland also aspire to become crypto-friendly.
The country offers favorable regulations for cryptocurrencies, clear guidelines for ICOs and low cryptocurrency income taxes for individuals and companies. The country classifies cryptocurrency as assets, and mining is treated as self-employment and taxed on business income.
Key factors behind the growth of these markets
Regional financial instability. The financial crisis and the decline in the value of the state currency stimulates the demand for digital currencies. Unlike traditional assets, cryptocurrencies are less affected by those crises, and crypto’s value is balanced everywhere. This makes it the best investment option for residents of regions with an unstable economic structure.
Supportive regulation. Countries' friendly policies regarding digital assets, legalization of the use of cryptocurrencies, favorable tax system and business support further influence cryptocurrency market size, enhancing its growth.
Transparency of operations. Traditional financial systems cannot boast of the high level of transparency of operations, unlike blockchain technologies. Transparency issues can arise if transactions are conducted without the knowledge of the interested party, for example, a deduction of scheduled payments or even fraudulent transactions. This alignment leads to an increase in dissatisfaction with traditional financial structures in society and driving the growth of the cryptocurrency technologies.
Challenges and risks in fast-growing crypto markets
Regulatory environment. One of the most significant challenges remains the regulation of cryptocurrencies. Uncertain policies and lack of regulations are a major sticking points to digital asset adoption.
Involvement in legal battles and security concerns. Virtual currencies raise suspicions among the government and society about their use for preemptive and illegal purposes such as money laundering, tax evasion, support for terrorism and drug traffic. It was noticed that the activities of criminals took place using cryptocurrencies. Moreover, growing security concerns and cyber attacks have led to the loss of invested currencies, limiting the adoption of cryptocurrencies. Therefore, the decentralized nature of blockchain technologies raises concerns of abuse among the authorities and can lead to restrictions or bans on their use.
Conclusion
Distributed ledger technology offers significant prospects for investors, society and the economy as a whole. Their impact extends far beyond the financial sector, promising to transform many aspects of our daily lives and jobs. At the same time, the success and sustainability of these innovations strongly depend on the regional development of technology, regulatory support and society's readiness to adapt.
Related posts
