Just five years ago, the cryptocurrency market had an estimated worth of approximately $541 million.
Other reputable sources, such as Research & Markets report, anticipate a CAGR of 19.04%, pushing the market towards $2.4 billion in 2023 or an estimated $5.15 billion by 2026. Crypto.com believes we will see 1 billion individual crypto users by 2022 according to their crypto market size report from January, 2022. These numbers are likely quite stretched to please investors, but if the above data is accurate, there will be a substantial growth in the short and medium term. In this article, Crypto Lists Ltd will look at the most popular cryptocurrencies and identify the world´s largest and smallest crypto markets.
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- 1 Which are the biggest cryptocurrencies?
- 2 Where has crypto adoption reached the furthest?
- 3 Where is the biggest crypto market?
- 4 Where do we see the biggest crypto gains?
- 5 What type of instrument can give crypto market exposure?
- 6 How long is a crypto market cycle?
- 7 Conclusion
Why do people want to invest in crypto?
The buzz around crypto has proliferated. Bitcoin has become a global sensation, and the decentralized finance model is a hot topic. So what’s the attraction of investing in the crypto market?
Speed and capacity – The fast growing crypto market is better suited for fast transfers and high capacity, compared to traditional transfer methods. Blockchains and crypto coins will be used for everything from flight memberships to every day payments in the coming years.
Potential profit: Everyone has heard of huge returns from investing in emerging cryptocurrencies, and who doesn’t like the prospect of earning easy money?
Quick, cheap transactions: decentralized finance cuts out the middleman, often saving money. Moreover, crypto can be the most effective way to trade with other countries in regions where the local currency is highly volatile or subject to international sanctions.
Anonymity: Your crypto wallet is your business. Unlike traditional banks, there are no questions about your funds’ source nor what you plan to do with them.
Even though that same anonymity and lack of regulation are off-putting for many, there is no sign of the crypto bandwagon slowing down at the moment.
Which are the biggest cryptocurrencies?
Bitcoin was the first crypto to gain traction. It is still the leader in market capitalization. However, since it achieved global fame in 2017, it has been joined by many competitors. According to statistics from 2022, Tether is currently the most traded currency, ahead of Bitcoin and Ether.
Bitcoin is still the most recognizable name in the marketplace. However, as a first-generation cryptocurrency, it has its flaws. Moreover, many feel its value has peaked, prompting a search for the next big thing. Tether, a stablecoin intended to have a 1:1 relationship with the US dollar, enjoys popularity because of that lack of fluctuation. Ethereum, conceived in 2013, is second only to Bitcoin in market capitalization.
Where has crypto adoption reached the furthest?
One of the most striking features of crypto adoption is that the developed world no longer leads the way. By contrast, Chainalysis shows that in 2021 the fastest adopters of crypto were Pakistan, Vietnam, India and Pakistan. Much of this crypto boom is driven by P2P transactions, essential for end users who often lack access to centralized exchanges.
Elsewhere, there is a clear link between high adoption and countries with weak fiat currencies. In Turkey, the lira has lost almost half its value against the dollar over the past 12 months, while the Argentinian peso has also nosedived. As citizens seek a haven for their money, crypto is gaining ground.
Nigerias crypto adoption leads the way in Africa — and again, the local naira currency has struggled over the past 12 months — while Kenya is also performing strongly. However, the region remains the world’s smallest crypto market, accounting for just 3% of total trade.
Turning to South-East Asia, crypto adoption in Thailand is similar to crypto adoption in the Philippines. In both countries, economic growth goes hand-in-hand with a crypto boom.
Overall, crypto adoption ran at 880% in 2021 (the most recent available figures). That figure suggests that the future is bright for crypto, with some expecting 1 billion users worldwide by the end of this year.
Where is the biggest crypto market?
Short answer: it depends. Asia has the highest number of users (more than 130 million per day, according to Triple-A). However, the USA has the greatest volume of crypto assets comfortably. Not surprisingly, the world’s biggest cryptocurrencies in terms of volume come from here.
The top five countries in terms of raw users are
India (100 million)
USA (27 million)
Russia (17 million)
Nigeria (13 million)
Brazil (10 million)
In terms of the population covered by crypto
It will be interesting to see how those numbers change for Russia as sanctions make it harder to access international markets using the ruble and traditional Russian banks.
Describing a ‘typical’ crypto owner is difficult because the demographics can vary significantly from country to country. However, Triple-A has some insights into American crypto users. It found that men are almost twice as likely as women to invest in crypto (19% of the population vs 10%) and tend to be young, affluent and well-educated.
Where do we see the biggest crypto gains?
Never mind rapid adoption elsewhere; the USA still reaps the overwhelming majority of profits from the crypto market. Chainalysis calculated that almost $47 billion went to the US out of global realized gains of $162.7 billion.
The United States has some of the strictest crypto regulations in the world. This shapes its market. The big plus is that regulation gives investors confidence; the downside is that markets can be hit by relatively high taxation.
By contrast, China has recently cracked down on digital currency, and its growth rate dropped to 194%. Sounds big? Sure, but in terms of the most significant crypto gains by country, it isn’t so impressive. The USA, UK and Germany posted 400%+ year-on-year.
Ethereum and Bitcoin remain among the most profitable cryptocurrencies. In most countries, they account for the bulk of all profits generated.
What type of instrument can give crypto market exposure?
There are various trading instruments available on the cryptocurrency market. These include spot trading, futures trading, CFDs, funds and crypto options.
Exchange Traded Funds (ETFs) are the most straightforward mechanism. Invest in a cryptocurrency or a basket of digital currencies, and the fund will track the market. Ownership costs are low, diversification is inbuilt, and little time is needed for research and management.
Futures & options
Futures trading hinges on a legal obligation that parties will exchange an asset on a set date for a predetermined price. This can protect sellers from a run on the market but can also see crypto sold below the market rate if a currency skyrockets before the trade date.
Crypto options are similar in that the option holder has the right — but not the obligation — to buy or sell assets at the strike price within a defined period. Options can be either puts or calls.
CFDs (Contractor for Difference) trades are a form of derivative and are best left to experienced traders. Traditionally, they were used for trades in gold or silver. In simple terms, they enable traders to take long or short positions on crypto assets offered by brokers.
The usual stop losses and take profit points can be applied. There are two significant advantages. First, the trader does not need to own a crypto wallet since the broker holds the actual asset. Second, it is possible to use leverage to increase your investing power, often at generous ratios. However, while these trades have been prevalent, there is a backlash. During the slump in 2020, CFDs bore the brunt of the losses. As Cryptopurview explained, tighter regulation also makes these trades more expensive to run.
The spot market
The crypto spot market is expected to reach over 10 billion monthly since institutional investors are taking more positions here, according to a manager at one of the major investment banks.
How long is a crypto market cycle?
The crypto cycle is not like the stock exchange cycle. All markets are subject to highs and lows. Cycles can be broken into four phases: accumulation, markup, distribution and markdown.
A complete cycle of a crypto bull market and a bear market usually takes around four years. Traders who study Bitcoin link this to ‘halvings’. With every 210,000 new blocks, Bitcoin halves the incentives for mining a new block. This happens roughly once every four years, coinciding with the crypto cycle.
However, as more hedge funds and institutional investors enter the crypto market, we expect to see crypto cycles align closely with the stock market.
When is the crypto market open?
Crypto never sleeps. Because these currencies trade online rather than through physical exchanges, the market is open 24 hours a day, 365 days a year.
There is no waiting for crypto market opening time and no pressure to make your trades before closing. That’s a boon for traders. Since most of us are not full-time traders, it’s great to dip into the markets whenever convenient.
All the evidence suggests that crypto will continue to rise. The coming months should see millions of new users and enhanced growth in a wealth of emerging markets. So, if you haven’t already dabbled in crypto, this could be the perfect time to start. Study the markets and polish your strategies. Get it right, and you could ride a crypto boom. To get started – check out the top crypto exchanges that allows you to use advanced strategies, or go with one of the best crypto platforms – which are easy to use and quick to get started with.