2021 was no doubt one of the most bullish years for crypto. Not only did the prices of cryptocurrencies surge tremendously during this time but there were many new entrants into the market both on an individual level and an institutional level. All of this contributed to getting the market to hit its highest market cap ever at above $3 trillion. However, looking at the growth in 2021, shows that crypto adoption was much higher than believed.
How Many Investors Got In?
The crypto market may not be the most popular form of investing in the finance world currently but one cannot deny that it is quickly catching up to its peers despite being very young. In this vein, it has seen more investors enter the space, mostly driven by the returns recorded by cryptocurrencies in 2021. A survey has shown that almost half of all investors who have purchased digital assets began doing so just last year alone.
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This survey that was carried out by Gemini showed that almost 50% of all crypto holders had performed their first purchase in 2021. The survey which consisted of 30,000 respondents from 20 different countries is one of the largest performed.
Countries like Brazil and Indonesia had led the pack in this regard. According to the Gemini survey, 41% of the respondents admitted to owning cryptocurrencies. Others like the United States and the United Kingdom came in behind these regions with 20% and 18% of all respondents saying that they owned any crypto.
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Why Crypto Adoption Is On The Rise
Mapping out the year for crypto, the report showed that 2021 was indeed the year of crypto. Some countries more than others had led the charge in this regard. However, while the adoption rate had been similar across the board, the reasons for crypto adoption have been quite different. The reasons behind the adoption ranged from wanting to fight inflation by holding cryptocurrencies to just purchasing the digital assets for their future potential.
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Countries with much higher inflation rates had more respondents who said that they purchased crypto as an inflation hedge. These included countries like India and Indonesia, both of which had recorded currency devaluation against the dollar as high as 17.5% and 50% respectively. 64% of respondents in these countries said they purchased crypto as an inflation hedge.
Other countries with lower inflation rates saw fewer people saying they purchased as an inflation hedge. In total, 15% of European respondents said they purchased crypto as an inflation hedge and 16% of Americans said they purchased for the same reason.
However, across the board, 79% of respondents who said they owned crypto in 2021 revealed that they had purchased the digital assets as a long-term investment due to their potential. This is in line with other surveys that have shown similar numbers over the past year.
Featured image from Investopedia, chart from TradingView.com
Source: https://bitcoinist.com/almost-50-of-crypto-investors-got-started-in-2021/