Slightly over fifteen years since its introduction into the finance world, cryptocurrencies have now become mainstream. With Bitcoin leading the charge, the crypto market is growing in several developed countries, including the US.
According to data recorded in 2023, 17% of US consumer savings are in cryptocurrencies. It is the second most favoured savings method in the US. This shows how invested the American populace is in the multi-billion-dollar industry. For this reason, financial experts have taken a keen interest in the market, going over its projections for years to come. Currently, they have forecasted unprecedented growth in the next four years, which is good news for crypto users.
Present data shows that the US crypto market will be valued at $32.9bn by 2028. This would be an annual growth of 9.10% over the next four years. That’s not all, as user penetration at the best crypto casino sites is expected to hit 29.12% as more and more users are beginning to see the benefits of using these sites over standard online casinos.
In this guide, we will be providing clarity on these figures. We shall look into the factors propelling this growth, the potential obstacles, and what impact it has on the US crypto industry and the country’s economy.
History of the Crypto-Market in the US
Before we take a look into the future of the market, it will be nice to learn from its past. And we can all agree that history is the best teacher.
The history of cryptocurrency in the US dates back to the emergence of Bitcoin in 2009. During its initial years, the market experienced significant volatility, which caused excitement and caution among traders and investors alike. Many would agree that this is the case to date, as fluctuation in price still occurs.
Looking back, the focal point is the Government being actively involved in the development and regulation of cryptocurrencies. An example is the 2014 Internal Revenue Service (IRS) ruling of Bitcoin being taxed as a property. Another example is the 2022 framework handing regulatory power to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The SEC is already regulating the sector, as evidenced by its extensive list of filings against crypto-centric businesses and projects. However, the ongoing battle between regulators and the cryptocurrency industry demonstrates that the United States continues to develop, regardless of the frameworks implemented.
The Current State of the Crypto-Market and Factors Driving the Projected Growth
Revenue in the worldwide cryptocurrency market is projected to reach $51.5bn this year. The US will be a major player, contributing over 50% to this growth. This is great news as 2024 is an eventful year for the market, with the recent halving of BTC and an expected bull run.
If you are a crypto enthusiast, you know the bull run won’t last forever. Why, then, do experts project the market to cross over $30bn in the next four years? Well, there are other things that contribute to the growth rate. These include institutional adoption, growth in retail investments, technological advancements, and more.
Let’s take a deeper look into these factors so we can gain a better understanding.
Increasing acceptance and adoption
The crypto industry has only been around for fifteen years. Within this period, it has grown remarkably but has yet to reach its full potential. With the crypto market growing each day and more people becoming interested in digital assets, we can anticipate an increase in adoption.
The cryptocurrency market overview reveals that individuals and businesses will turn to crypto in the coming years as it is secure and efficient. It will also be used as a hedge against inflation. For US businesses reaching out to new horizons, cryptocurrencies would be advantageous based on lower transaction fees.
Technological advancements
Technology is pivotal in driving the cryptocurrency market forward. As blockchain technologies become more innovative, the scalability and speed of crypto transactions become enhanced. This will reflect in the market’s revenue growth. Also, cryptocurrencies would get integrated into more industries, such as real estate and digital content creation.
Areas in which technological advancement is anticipated include DeFi (decentralised finance) and NFTs (non-fungible tokens). Their use cases would be majorly smart contracts, decentralised apps (DApps), and tokenisation of assets. These aspects of blockchain technology will open new avenues for investment and application, attracting a new generation of investors.
Regional factors and regulatory developments
In the US, the crypto market is influenced by a variety of regional factors and regulatory developments. Although the country happens to have major players in the industry, regulatory clarity remains a challenge. The Securities and Exchange Commission (SEC) have been trying to clamp down on several crypto initiatives, which has created uncertainty for investors and businesses.
The SEC hasn’t been fruitful in their pursuits, and it is expected that they will compromise their regulations. This compromise might not be favourable for the industry, but it would see more Bitcoin exchanges enter the US market, bringing healthy competition and maturity to the industry. This, in turn, would drive the number of investors and lead to greater revenue.
Potential Challenges and Risks
Despite the optimistic outlook by industry experts, the journey to $32.9bn is filled with obstacles. The crypto market is filled with ups and downs, and as we have considered the ups, we also have to examine the potential downs. Briefly, let’s go over the potential risks.
Regulatory uncertainty
The major issue in the US has to be the regulatory framework. The SEC is currently in a tug-of-war with crypto-centric businesses and projects over their crypto products and services. If this becomes a theme in the country, it could potentially deter investors and slow down market growth.
Market volatility
Market volatility is another major risk. Cryptocurrencies are known for their dramatic price fluctuations. While this volatility can lead to high returns, it can also result in substantial losses. This inherent riskiness makes cryptocurrencies an unstable investment. If the downturn is significant, it could hinder market growth.
Final Thoughts: Future Outlook and Impact on the Economy
Looking beyond 2024, the future of the US crypto market appears promising but uncertain. Potential trends include the mainstream adoption of cryptocurrencies, the development of crypto regulations, and the integration of blockchain technology in various sectors.
Economically, it could lead to job creation and new investment opportunities. Societally, cryptocurrencies could democratise finance by providing access to financial services to those currently unbanked.
The projection of the US Crypto-Market reaching $32.9bn by 2028 is based on current trends and factors. While challenges exist, the potential benefits for the economy and society make it a development worth watching.