The short-term scenario for the cryptocurrency market remains bleak: Reports
The cryptocurrency market had its worst quarterly performance during the second quarter of 2022. All major cryptocurrencies fell sharply during this period. Bitcoin [BTC] and Ethereum [ETH] The headline was the sharp drop in the state of the cryptocurrency market. The decline in asset prices has also led to a change in the patterns of wealth distribution among investors.
The Boston Consulting Group has released a report on the future of cryptocurrency exchanges with Bitget and Foresight Ventures. The report attempts to capture the various aspects of cryptocurrency trading across the cryptocurrency market. Increased cryptocurrency adoption and macro trends have led to a sharp rise in the global trading volume of cryptocurrencies.
According to the report, the global central exchange volume reached $54 trillion in 2021. Historically, spot trading volume is closely related to the overall market capitalization of cryptocurrencies and volatility. The massive increase in volume also reflects the growing interest in crypto assets. According to Goldman Sachs, cryptocurrencies currently represent approximately 20% of the global “store of value” market. With the emergence of institutional investors, there is a growing demand for hedging and generating returns. The report anticipates that organized players will introduce centralized options to support the growing demand. FTX’s acquisition of LedgerX is a signal of an increasing trend.
aggressive growth pattern
Some regions have been posting huge numbers for cryptocurrency trading in recent times. The Middle East is one of the lucrative regions that are boosting the growth of cryptocurrency. The region accounts for 4% of global spot and derivatives trading value in 2021. Israel remains an attractive platform with its “mature financial market.” The report also highlights Turkey, the United Arab Emirates, and Saudi Arabia for their contribution to cryptocurrency trading in the region.
Moving on to South Asia, the region accounts for about 2-3% of global cryptocurrency trading. India, Thailand and Vietnam remain the largest contributors in terms of commercial value. India represents the highest growth potential in the region with a large number of retailers. Growth in the region is expected to pick up with increased regulatory clarity.
There are problems in the current crypto economy and they will continue to hamper development if left unchecked. Besides intensifying macro conditions, the short-term crypto scenario remains bleak for now. However, the report ended on a positive note as senior members of BSG remained bullish on the cryptocurrency industry.
Despite the recent turmoil in the market, we believe that the market has opportunities for growth in the future. As competition intensifies, cryptocurrency exchanges must adapt to the dynamic market situation and shift their strategy to beat the competition.” — Tjun Tang, Managing Director and Senior Partner, BSG.