The term cryptocurrency has gained massive traction in the last few years, and by the end of 2024, it was reported that total digital assets users worldwide had crossed the milestone of 600 million, surpassing some traditional industries.
Yet several factors determine the growth in the adoption; however, the adoption of crypto in the entire 2024 and the end of 2023 was fueled by the approval and launch of the Bitcoin spot ETF.
In today’s article, we will be discussing the hype of regulatory approval of Bitcoin spot ETFs and especially the traction it gained after launch for the small investors’ traditional market of the United States.
Is Bitcoin ETFs’ popularity the main reason behind crypto adoption?
According to a few reports, the total number of people using cryptocurrencies is above 80 million, which is around 1.01% of the global population, a total daily volume of $4.26 billion, and a total market capitalization of $100.76 billion.
Before the approval and till the launch, GrayScale was one of the major players in the Bitcoin spot ETF category, yet in mid-2024, one of the most prominent fund asset managers, BlackRock, debuted in the market and currently holds the most Bitcoin among all ETF providers.
Spot Bitcoin ETFs are a smaller portion of BTC that can be traded at a lower rate in the traditional stock market; the U.S. market is known as one of the biggest stock markets in the world.
It is worth noting that Bitcoin spot ETF has contributed to the growth of the broader crypto market, yet it can not be the sole reason behind the growth.
Factors regarded as the key drivers behind the surged adoption of Crypto
Other than crypto ETF, several factors that are driving the growth of crypto worldwide are the growing interest of institutional investors in digital assets, its accessibility in the mainstream, cultural shifts, and other unprecedented natural calamities and pandemics.
- Institutional adoption- Over the past few quarters, several companies have announced their plan to invest in cryptocurrency, primarily focusing on investments in Bitcoin and Ethereum. Publicly listed companies such as Strategy (Earlier MicroStrategy) and MetaPlanet have gained massive attention due to their back-to-back acquisition of Bitcoin. It is worth noting that with these purchases, ‘ stock these companies’ stock has reached a new milestone, trading better than the price of companies not involved in the crypto market.
- Wider accessibility- In today’s technological era, the accessibility of almost every available industry is possible using smartphones and the internet. With the launch of various crypto-based products and platforms, the launch of centralized exchanges has attracted many more users. Almost in all countries, dozens of digital assets services providers offer their services and direct exposure to the crypto market.
- Cultural shift- The migration of traders from the traditional stock market to the crypto market came following the fewer gains and struggles of the market, especially since the Indian market remains under-red, pushing the digital asset adoption to new heights. It is crucial to understand that the risk of centralization and other hassles is becoming a major factor for the migration of stock market enthusiasts.
- Global Pandemic- The disastrous pandemic that hit the world, resulting in unwanted life losses and financial and monetary losses, has also taught new digital lessons to the masses; after 2021, the total number of internet users reached a new milestone recorded before 2021.
Will the crypto user base surpass the 900 million milestone?
The future growth of crypto depends on several factors, such as technological advancements, regulatory favoritism, and the growing popularity of blockchain-based products among the younger generation, which also plays a significant role.
If the above factors are favored, the cryptocurrency market is expected to reach new heights, and the market trends will indeed support further spikes.
Until publishing, the crypto market cap was $2.82 trillion with a decline of 3.26%, and Bitcoin was still below $90k at $86,980 with a loss of 3.42%.
Yet market watchers still suggest investors stay cautious and invest there, saying before a deep analysis and understanding of the project of token they are investing in.
