With the authorship of Dorina Nicoara-Popescu, and Denis Boevskiy, fintech and finance experts, EAE Business School published a report in which it indicated the evolution and behavior of the cryptocurrency market in recent years and the main factors that affected this sector.
According to the report called ‘The fintech industry, new trends in the financial sector’, since 2020, the year of the pandemic, the global cryptocurrency market has grown exponentially by 478%. However, they stressed that some of the major “crypto countries” showed mixed performance, causing stagnation during 2022 compared to 2021, which despite the market shocks registered an increase of 45%.
Source: The fintech industry – New trends in the financial sector (Data from Statista)
In context, only non-European countries registered growth of their crypto markets, such as Vietnam (40%), Brazil (37%), Mexico (34%), Indonesia (32%) and India (30%), while some European countries such as Germany, France, the Netherlands and even Spain contracted (6%), followed by Russia (10%). At the same time, the value of transactions in the US increased by 17% to reach 18.5 billion dollars during 2022.
Source: The fintech industry – New trends in the financial sector (Data from Statista)
Factors that affected the cryptocurrency market
According to the report, There have been several key factors that have influenced the cryptocurrency and blockchain sector in recent years, the first was the fall of bitcoin from 40,000 to below 20,000 dollars in 2022, which affected the entire world. market as it is the cryptocurrency with the greatest dominance, having more than 40% of the crypto market capitalization.
In second place, they cited the bankruptcy of the FTX exchange in mid-2022, which shook the crypto market in general, as did the collapse of the Terra ecosystem with its Luna cryptocurrency, affecting confidence in this market since it had been one of the main cryptocurrency exchange providers.
Cryptocurrency Market Trends and Blockchain Adoption
In this sense, the report states that The increase in business models based on blockchain technology for companies and governments, as well as the tokenization of society, finance through DeFi, and the economy, are some of the trends that drive trust in decentralized operations between individuals.
Likewise, they point out that all this adoption and promotion of the cryptocurrency sector generates the trend of regulation required by governments to avoid legal fragmentation and guarantee the protection of consumers and investors in digital assets. Having said this, the authors of the report consider that said regulation allows updating the financial market regulations for crypto assets and creates a common legal framework for financial supervision. “Governments and financial institutions are now much more focused on protecting end users from blockchain-based business models”they highlighted.
Finally, they cited the issuance of digital currencies by central banks as a trend, which as cryptocurrencies become a constant in the financial landscape, they are exploring the possibility of issuing their own digital currencies (CBDC, Central Bank Digital Currencies).
“Theoretically, a CBDC could do away with bank intermediation altogether: individual citizens could have their CBDC savings directly with the central bank, eliminating the role of commercial banks. In practice, however, this is extremely unlikely, as it would seriously destabilize the banking system.”they commented.
“For this reason, we can think of CBDCs as a digital replacement for physical banknotes. The flow of digital money is likely to occur through financial intermediaries, in the same way as traditional cash.”they concluded.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
It may interest you:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.