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Cryptocurrency Market Size, Share and COVID-19 Impact Industry Analysis, By Component (Hardware, Software), By Type (Bitcoin, Ether, Litecoin, Ripple, Ether Classic, Others), By End-use (Trading, E-commerce and Retail, Peer-to-Peer Payment, and Remittance), and Regional Forecast, 2020 – 2027

Region : Global | Format: PDF | Report ID: FBI100149

 

KEY MARKET INSIGHTS

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The global cryptocurrency market size stood at USD 754.0 million in 2019 and is projected to reach USD 1,758.0 million by 2027, exhibiting a CAGR of 11.2% during the forecast period.

COVID-19 Cover

This report covers COVID-19 impact analysis on Cryptocurrency Market

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With advanced technological developments, virtual currency exchange methods have been invented and evolved rapidly in past few years. Virtual currencies were initially limited for demonstrable transactions in social and gaming economies. In last decades, the developed concept of virtual currencies emerged as cryptocurrencies. The cryptocurrencies were aimed to eliminate financial intermediaries by direct peer-to-peer transactions. Most of the developing countries like the U.S., Germany, China, and the U.K. have started adopting cryptocurrencies as an exchanging medium. The terms used for the digital currecy varies from country to country, such as payment token (Switzerland), digital currency (Thailand, Australia, and, Argentina), crypto-token (Germany), virtual commodity (Taiwan, China, and Canada), virtual asset (Honduras and Mexico), cyber currency (Italy and Lebanon), and electronic currency (Colombia and Lebanon).


The increasing popularity of digital assets like Bitcoin and Litecoin is likely to drive the market growth in the forthcoming years. Moreover, digital currency is also often utilized with the integration of blockchain technology to attain decentralization and controlled efficient transactions. The block-chain technology offers decentralized, fast, transparent, secure, and reliable transactions. With these advantages of blockchain and cryptocurrency, companies are investing and collaborating with other companies to deliver efficient and quality services to the users. For instance, in October 2018, Qtum Chain Foundation based in Singapore partnered with Amazon Web Services (AWS) China to deploy blockchain systems on the AWS cloud. This collaboration was aimed to help AWS users to use Amazon Machine Images (AMI) to develop and publish smart contracts easily and efficiently.


COVID-19 Impact on the Market


With the spread of the global Coronavirus pandemic (COVID-19), the relationship between Bitcoin and the equity market has expanded. For example, on 12 March 2020, the price of Bitcoin fell below USD 4,000 after a sharp decline in the S&P Index in the U.S.


As the Initial Coin Offering (ICO) market has essentially crashed, blockchain companies are now primarily trying to raise investment capital. Nevertheless, despite the proliferation of the coronavirus and the instability concerning the global economic environment, this form of gaining investment has also created considerable confusion over the period.


Geographical Factor


The magnitude of changes within the project closely correlates with the degree of coronavirus spread in a particular region. For example, according to news published by Cointelegraph, China allegedly stopped the propagation of the pandemic through its territories, and revealed that it will introduce its national blockchain network in April 2020, as originally scheduled. Following the recent closing of their offices and facilities, Chinese mining firms have paused their operations due to extensive virus spread in the region.


Meanwhile, Russia which is facing dramatic rise in the number of COVID-19 incidents, has indefinitely postponed the implementation of cryptocurrency laws. Earlier, the Russian government halved the allocation for the advancement of blockchain technology. New York, which is facing an unprecedented amount of reported coronavirus infections, has had nearly all major firms have closed down their offices.


Firms Cutting down budgets and Staff


Large blockchain analytics companies such as Elliptic, Chainalysis and CipherTrace announced that they have either reduced their staff or budgets or intend to do so in the immediate future to mitigate the economic effects of the epidemic of COVID-19.


For instance, Elliptic has eliminated 30% of the workers in the U.S. and the U.K.; CipherTrace has decreased the jobs of the advertising and marketing departments, and Chainalysis has revealed proposals to reduce employees' wages by 10%.


Restrictions in Crypto Tokensales


The constraints and economic problems induced by coronavirus have left several token sales without investment while causing others to delay their production. The recent research study by ICOBench in 2020 reveals that the contributions made by the companies during the last week of January to the first week of February were significantly smaller than in the same timeframe last year.


Moreover, the virus spread has forced crypto companies to implement work from home strategy and had delayed many business partnerships.


Although the long-term impact of COVID-19 on economies cannot be predicted. Considering the cultures, and individuals’ well-being, it seems a reasonable bet that the reaction of central banks would build an ideal atmosphere for the market to sustain. If Bitcoin continues to outperform conventional markets, it may certainly spark further interest in crypto as an alternate and sustainable form of currency.


MARKET TRENDS


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Digital Currencies Adoption Trending in the Market


The popularity of virtual or digital currency such as Bitcoins, Litecoins, Ethers, and many more are expected to drive the market in the forthcoming years. People from developed countries are likely to adopt the easy and flexible transactional method offered by digital currency. This popularity of virtual currency as an exchanging medium led the central bank to support the digital currency. The central bank patented Central Bank Digital Currency (CBDC) activity provisions for the digital currency projects across many developed countries. For instance, Bank of Thailand and Central Bank of Uruguay are applying the toolkit to its CBDC evaluation process; Eastern Caribbean Central Bank and People’s Bank of China, are also supporting CBDC for adopting cryptocurrencies as an exchange medium. The growing popularity and acceptance of digital currencies is expected to drive the market growth. Several companies such as Facebook, Inc. are expanding their business by offering cryptocurrencies. For instance, in June 2019, Facebook, Inc. launched a digital currency named Libra. Libra will enable customers to buy things or send money to others and cash out Libra online or at grocery shops. However, the project was scaled back due to regulatory approvals, security issues, and concerns.


Growing Number of Decentralized Exchange Platforms


A centralized method of currency exchange does not use blockchain for recording transactions which increases the chances to lose the security of the system. With increasing security regulations such as AMS/KYC, centralized exchange platform showcasing legacy, and lack of flexibility with financial transactions. Although the security concerns associated with the centralized transaction system might lead to loss of funds. Advanced decentralized exchange (DEX’s) platform offers blockchain technology and peer-to-peer connection which inhibits third party involvement in the transaction and made transaction system speedy and easy. These advantageous features of the system become popular which encourages the key players to expand their decentralized exchange portfolio. For instance, in August 2019, Exadel, Inc. partnered with Adax Tech Limited (ADAX), to offer blockchain-based and customized decentralized exchange platform for financial as well as non-financial assets.


MARKET DRIVERS


Focus on Mitigating Financial Crisis and Regional Instability Drives the Demand for Virtual Currency


Financial disaster is a  major issue occurring in traditional banking and the financial sector. Financial uncertainty disturbs the economy by dropping the value of the currency. With Bitcoins or other cryptocurrencies, there is no major effect of the financial crisis on it as its value is balanced universally. Cryptocurrencies are better options in financial uncertainty for the regions with unstable economical structure, which is becoming a major market driving factor for the market.


Increasing Adoption of Bitcoin to Boost the Cryptocurrency Market Growth


Bitcoin one of the most popular and majorly adopted digital currencies across the world. The rising visibility, growing interest of investors, and supporting regulations are further augmenting the growth of the market. Maturing bitcoin cash value and facility to offer rewards for transactions are also upsurging the market value for digital currencies. Developing countries like Japan, the U.S., European countries, and many more are indicating people's inclination towards digital currency, which is expected to contribute to the growth of the market in upcoming years.


MARKET RESTRAINT


Misuse of Virtual Currency and Security Attacks Confines the Adoption of Cryptocurrencies


As virtual currencies is an unauthorized, decentralized, and uncontrollable exchanging platform, many regulators are worried about increasing misuse of these currencies by criminals for illegal activities. It has been seen that many unlawful activities like tax evasion, money laundering, and terrorist financing had carried out by criminals using digital currencies. In July 2019, Treasury Secretary Steven Mnuchin shared their concerns about the misuse of Facebook, Inc. patented Libra digital currency by terrorist financiers and money launderers.  Moreover, growing security and cyber-attacks has led to the loss of the invested currencies, which majorly limiting the adoption of cryptocurrencies. For instance, In February 2020, cryptocurrency exchange platforms of Okex.Com and Bitfinex companies has been disrupted with Denial of Service attacks. Such security concerns and misuse of digital currencies becoming a major restraining factor for the growth of this market.


Criminals and terrorists are more inclined to deal in cash and keep cash as collateral than to use financial intermediaries such as banks and avoids the anti-money laundering reporting and compliance regulations. Businesses and governments became worried that the pseudonymous and decentralized nature of digital currency transfers might offer a way for criminals to conceal their financial activities from the authorities. For instance, Bitcoin was used on the web-based, illegal drug market called Silk Road. This exchange and Bitcoin escrow program allowed more than 100,000 illegal product transactions from about January 2011 until October 2013, when the government shut down the company and detained persons operating the platform.


Criminal usage of virtual currencies would not automatically mean that blockchain is a net negative for the community, since the advantages it offers may outweigh the social expense of increased criminality enabled by virtual currency. Law enforcement agencies have the potential to minimize the usage of digital currencies for the intent of preventing law enforcement. In addition to the ability of law enforcement to prosecute violence, the government has the right to restrict digital currency exchanges to legislation relating to the monitoring of criminal behavior.


Impact of regulation


Many state agencies and federal commission in the U.S., along with agencies in other countries are seen to regulate some applications for digital currency. However, different approaches taken by different agencies within the U.S., as well as different countries, led to confusion about the regulatory and authorities regarding cryptocurrency and blockchain technology. The lack of support from governments and proper regularization around the world is one of the serious limiting factors for the growth of the market. Unprotected structure of virtual currencies restraints investors to spend on cryptocurrencies.


Some regions have banned digital currency as it has been used by criminals for illegal activities, such as money laundering and terrorism, while some of them are supposed to regulate the virtual currencies. For instance, in March 2020, the Reserve Bank of Zimbabwe planned to develop a regulatory framework for checking operations of companies dealing with cryptocurrencies.


SEGMENTATION


By Component Analysis


Cryptocurrency Software Segment is Expected to See Healthy Growth During the Forecast Period 


By component analysis, the market has been segmented into hardware and software. The hardware segment is further classified based on platform types as Graphical Processing Unit (GPU), Field Programmable Gate Array (FPGA), Application Specific Integrated Circuit (ASIC), and others. ASIC mining hardware is expected to hold the largest share mainly owing to the high performance and high hash rate it provides while mining a specific coin.


The software segment is further categorized into mining software, exchange software, payment, wallet, and others. Exchange software uses a trading engine that is a single interface for connecting offers and exchanges with cryptocurrency derivative. The platform used to match sell and buy from users, which is holding the largest share in the market. Significant dispersion of exchange platform likely to drive the market globally. Whereas, wallets can be hardware or software wallet. Software wallets or digital wallets are seen to be adopted majorly due to its security enhancement. Depending on the control of the user over private key protection function, digital wallets are categorized again as a self-hosted or custodial wallet.


Moreover, cryptocurrency payment offers the use of currency services either national currency focused or digital currency focused. Majorly cryptocurrency-focused payments are dominating the market. Apart from this, mining is either software or hardware platform, depending upon the method of mining the respective value chain, mining is divided as self-mining, cloud mining, remote hosting, and mining pool. Cloud mining and mining pool are seen to be popular in the market.


By Type Analysis


Adoption of Bitcoin to Account for Maximum Share


By type, the cryptocurrencies are categorized into Bitcoin (BTC), Litecoin, Ether, Ripple, Ether Classic, and others. Among these cryptocurrencies, Bitcoin is the majorly adopted digital currency in the market. According to the report published in 2017, by Deutsche Bank AG, bitcoins are most trading digital currencies and held maximum market share. Another favorable virtual currency trading in the market is Ether, which can be used as payment method for accounting, investing, and implementing smart contracts and decentralized programs. Ether is expected to experience moderate growth rate in the market.


Similarly, Ripple is used to verify debentures. The network established with ripple generates creditor-debtor relations and account balances accessible for each user within the network. Technical implementation of Litecoin is the same as Bitcoin whilst it has the advantage that it is four times faster than bitcoin, which is projected to lead the market in upcoming years. Other cryptocurrencies such as Dogecoin, Moneor, and Dash also makes a considerable contribution to this market growth.


By End-use Analysis


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Cryptocurrencies are Expected to be Adopted Majorly for Remittances Resulting in Flourishing CAGR


Based on end-use, the market is categorized into e-commerce and retail, trading, peer-to-peer payment, and remittance. Trading and e-commerce and retail segments are expected to hold a major market share. For instance, in September 2019, The German branch of chain Burger King restaurant accept bitcoin as payment for its online deliveries and orders. The penetration of virtual currencies in the digital payment is expected to affect the cross-border remittances. The financial institution is directing towards blockchain technology which is expected to drive the market in upcoming years.


REGIONAL ANALYSIS


North America Cryptocurrency Market, 2019 (USD Million)

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Geographically, this market is segmented across five major regions, namely North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.


North America market holds the largest share in the global market in 2018, as most of the part of the region bitcoins treated as a medium of exchange for tax purposes rather than currency. Although the fact is not legally regulated by the government, nevertheless still many developed countries like the U.S., the U.K., Japan, and Singapore are seen to use digital currency. Acceptance of digital currencies by the consumers as well as retailers drives the growth of the market. Additionally, popularity of bitcoin mining and presence of majority of key players is dominating the market in North America. However, the effect of COVID-19 pandemic on the nation is expected to affect the economy of the country.


Besides, several technological developments and acceptance of virtual currency for some platforms within Japan and Taiwan expecting to majorly push the Asia Pacific cryptocurrency market. Strategical collaborations, partnerships by key players also contribute to the market in Asia Pacific. For instance, in January 2020, Z Corporation, Inc. and TaoTao, Inc. announced collaboration with the financial service agency to expand this market by confirming regulatory compliance in the Japanese market. Japan recently had accepted a new cryptocurrency exchange during the COVID-19 outbreak. Similarly, Malaysia’s Securities Commission legally has authorized cryptocurrency exchange operators to operate in the country even though the national lockdown due to the coronavirus pandemic. It can be expected that effect of the COVID-19 outbreak may offer an opportunities for this market growth in certain economies.


Although, many countries of Europe and from Middle East and Africa (MEA) also showcasing approach towards the adoption of cryptocurrencies. Europe and MEA are also projected to see large growth rate followed by Asia Pacific in the forecasting period. The UAE and Dubai in are at the forefront of blockchain development in the Middle East, while Bahrain and Saudi Arabia have recently taken measures towards acceptance.  The UAE as a whole is now introducing open ledger solutions. At the end of 2017, the central bank of the UAE declared that it will collaborate with its counterpart in Saudi Arabia, the Saudi Arabian Monetary Authority (SAMA), to create a digital currency that could be used by both institutions and some commercial banks for fast and secure settlements. Financial services firms in the region are among those who may profit greatly from the introduction of blockchain technologies in fields such as payments, supply chain, finance, and trading, as well as monitoring, compliance, and operations.


KEY INDUSTRY PLAYERS


Focussing on Enhancing and Expanding Currency Exchange platforms


Binance.com is continuing its market position by enhancing and expanding its trading platforms. The company is developing new strategic partnerships and banking relationships to develop business globally. The company is continuously focusing on developing the existing ecosystem and product offerings, like flat to crypto gateways. Binance.com offers exchange specific cloud solution that helps customers as well as partners to efficiently set up digital asset trading platforms. The strategy officer of Binance.com, Gin Chao, strategically managing and developing company business ventures. Intentional mergers and acquisitions allow the company to develop its business across the world.



  • December 2019 –  Binance.com strategically invested in the derivatives exchange platform  FTX. The FTX platform will help to build out the liquidity and institutional product to enhance company ecosystem such as exchange and over-the-counter (OTC) trading desk.

  • February 2019 - Binance.com launched the cloud infrastructure solution, called the binance cloud, for customers and partners. The solution offers digital asset exchanges along with  liquidity and security.


Key Players Strategically Together for Expanding Business


Key players in this global market are strategically collaborating and forming partnerships to enhance digital currency adoption. The partnership strategically enhanced cryptocurrency adoption within the country. Moreover, key players are also enhancing their product platform by adding a number of cryptocurrencies in their offerings to improve trading. Major companies in the market are focusing to increase the liquidity of their product suit to improve power range of trading features.



  • November 2019 - Binance.com acquired WazirX, based in India to expand its business across the country. The acquisition enables company to adopt and build on new financial technologies such as auto-matching engine to simplified the cryptocurrency access.

  • April 2020 - Bitcoin.com partnered with the Bit Mining company for expanding their bitcoin mining services, bitcoin pools across Japan.


List of Key Companies Profiled:



  • Binance.com. (Malta)

  • Bitfury Group Limited (The Netherlands)

  • BitGo, Inc. (United States)

  • Bitmain Technologies Ltd. (Saint Bitts LLC) (China)

  • Coinbase (United States)

  • CoinDesk.com (United States)

  • Intel Corporation (United States)

  • Ripple Labs, Inc. (United States)

  • Xilinx (United States)


KEY INDUSTRY DEVELOPMENTS:



  • April 2020 – Bitmain Technologies Ltd. announced about the launching of its new mining facility and blockchain data center at Milam, Texas, the U.S. The company expects that the investment will represent a key component to expand its business portfolio across North America.

  • October 2019 – The United Nations Children’s Fund, commonly known as UNICEF has started a new cryptocurrency fund, were receiving, holding, disbursing of donations are carried out in cryptocurrencies. Branches of UNICEF in Australia, New Zealand, and the U.S. are also primed to receive cryptocurrency.


REPORT COVERAGE


The report offers qualitative and quantitative insights on the cryptocurrency market and the detailed analysis of market size & growth rate for all possible segments in the market.  Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape.


An Infographic Representation of Cryptocurrency Market

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Key insights provided in the report are the adoption trends of digital currency by individual segments, recent industry developments such as mergers & acquisitions, consolidated SWOT analysis of key players, partnerships, Porter’s five forces analysis, and business strategies of leading market players, key industry trends, macro, and micro-economic indicators.


Report Scope and Segmentation

















































  ATTRIBUTE



 DETAILS



Study Period



  2016 – 2027



Base Year



  2019



Forecast Period



  2020 – 2027



Historical Period



  2016 – 2018



Unit



  Value (USD million)



By Component




  • Hardware

    • FPGA

    • ASIC

    • GPU

    • Others (Paper Wallet, Web Wallet, etc.)



  • Software

    • Mining Software

    • Exchanges Software

    • Wallet

    • Payment

    • Others (Vaults, Encryption, etc.)





By Type




  • Bitcoin

  • Ether

  • Litecoin

  • Ripple

  • Ether Classic

  • Others (Dogecoin, Moneor, Dash, etc.)



By End-user




  • Trading

  • E-commerce and Retail

  • Peer to Peer Payment

  • Remittance



By Region




  • North America (the U.S. and Canada)

  • Europe (the U.K., Germany, France, Russia, and Rest of Europe)

  • Asia Pacific (Japan, China, India, Australia, Southeast Asia and Rest of Asia Pacific)

  • Middle East & Africa (South Africa, GCC and Rest of the Middle East & Africa)

  • Latin America (Brazil, Mexico and Rest of Latin America






Frequently Asked Questions

As per our (Fortune Business Insights) study, the global market is predicted to reach USD 1,758.0 Mn by 2027 with a CAGR of 11.2% (2020 – 2027).

Cryptocurrencies used in trading, e-commerce & retail, remittance and peer to peer payment.

In 2019, the global market was USD 754.0 Mn, and it is anticipated to reach USD 1,758.0 Mn by 2027, reflecting a CAGR of 11.2% during the forecast period from 2020 to 2027.

hardware is the leading segment in the market.

The rising popularity of bitcoins and different altcoins is driving the market.

Some of the major players in the market are Bitmain Technologies Ltd. (Saint Bitts LLC.) and Binance.com.

Cryptocurrency Market Size, Share and Global Industry Trend Forecast till 2026
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