According to a survey by the Wells Fargo Investment Institute, the adoption rate of cryptocurrencies is comparable to that of other modern technologies like the internet and electricity.
Crypto adoption is similar to that of the internet boom in the 1990s
Miller, a former chairman of Legg Mason Capital Management Value Trust, also described KPMG Canada’s recent Bitcoin and Ether allocations to its balance sheet as a bullish move for crypto, citing the accountancy firm’s diverse clientele.
“I believe you’ll see a lot more adoption among foundations, endowments, and institutions this year, and that trend will continue,” he said. According to the paper, internet technology went through this period in the mid-to-late 1990s.
“Internet use grew from 77 million in 1996 to 412 million in 2000, after a modest start in the early 1990s. According to the research, “by 2010, global internet use had climbed to 1.98 billion, and it now stands at 4.9 billion.”
Based on the resemblance in the first few years, the research predicts that cryptos would follow a similar growth path. Since 2014, the expansion of cryptos has been comparable to that of the internet in the 1990s.
“If this trend continues, cryptocurrencies may soon exit the early adoption phase and approach a hyper-adoption inflection point,” the paper stated. Now is the time for regulators to step in and help cryptocurrencies.
According to the research, “the lack of a regulatory structure is a crucial hurdle to be overcome,” since it was named as the top one reason why high net worth investors were afraid to participate in cryptocurrencies in a 2020 Bloomberg survey.
Though the Indian government is considering introducing a cryptocurrency regulation, nothing has been done so far. However, India’s Union Budget 2022 imposed high taxes on cryptocurrency transactions, creating yet another barrier to adoption.
India has the world’s second-largest cryptocurrency user base, according to a Chain analysis forecast for 2021. India has 10-15 million cryptocurrency investors. The report’s findings reveal that cryptocurrencies are extremely volatile.
“Bitcoin is the oldest and perhaps one of the least volatile cryptocurrencies,” according to the research, but it is still nearly four times more volatile than gold and a basket of global equities.
It continues, “early-stage investing is typically riddled with severe boom and bust cycles, as many a dot-com business and investor can attest from 20 years ago.”
“Today, there are over 16,000 cryptocurrencies, and if history is any indicator, many will fail (or at least fail to scale),” the research continues. The paper also mentions the 2017 shakeout event, in which over 1,700 cryptocurrencies (40 percent at the time) went bankrupt, and cautions that similar catastrophes may occur in the future.
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