Market Trends of Bitcoin Technology Industry
BFSI to Occupy the Largest Market Share
- The growing adoption of blockchain or distributed ledger technologies in the sector can help increase investment by the BFSI sector in bitcoins. For instance, by establishing a decentralized ledger for payments (e.g., bitcoin), banking solutions could facilitate faster payments at lower fees than traditional systems.
- Technology can also enhance security while borrowing money and provide lower interest rates by eliminating the need for gatekeepers in the loan and credit industry. Also, by replacing the hefty bills of lading process in the trade finance industry, the technology can provide more transparency, security, and trust among trade parties internationally.
- Facilitating payments is highly profitable for banks. From letters of credit to payments, cross-border transactions generated 40% of global payments transactional revenues in 2016. Therefore, banks can also leverage Bitcoin payment services, like remittance services, to utilize these opportunities.
- Apparently, J.P. Morgan, in the first half of 2022, some 300 banks intend to introduce bitcoin trading through mobile apps. The NYDIG, a bitcoin financial services company that has already made some inroads into the banking industry, including a sub-custody agreement with United States Bank, is partnering with many of these banks. Not the first bank to enter the cryptocurrency market is Synovus Financial. The Oklahoma-based Vast Bank claims to be the first U.S. bank with a national charter to provide cryptocurrency through a mobile app.
- The first major bank to introduce cryptocurrencies to its wealth management clients was Morgan Stanley in 2021. For clients with at least USD 2 million in assets maintained with the bank, Morgan Stanley provided access to the three Bitcoin funds.
- Despite Bitcoin's dramatic price swings and the increasing governmental crackdown, large financial institutions have invested and expanded their operations. One of the first large Wall Street banks, Bank of New York Mellon, stated in February 2021 that it would keep, transfer, and issue Bitcoin for asset management clients.
- The launch will take place later this year, in 2022. Customers will be able to store bitcoin and ether, the two most significant cryptocurrencies, in BNY Mellon crypto wallets built in collaboration with crypto infrastructure provider Fireblocks.
- Moreover, In January 2022, El Salvador’s government announced they would send Congress about twenty bills covering financial markets and investment in securities to provide a legal foundation for issuing bitcoin bonds. The government was drawing up legislation to create a framework to cover corresponding market regulation and issuance of the securities in crypto assets after the Central American country said in November 2021 that it would issue bitcoin bonds.
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North America to Witness the Highest Growth
- North America is one of the most rapidly growing regions regarding Bitcoin mining, and vendors offering Bitcoin services are also expanding in this region. For instance, Celsius, a global cryptocurrency yield-earning platform, announced investments of over $200 million in mining equipment and positions in Core Scientific, a customizable infrastructure and software solutions for Blockchain networks. These investments serve to scale Celsius' existing interests to make it one of the largest U.S. investors in the Bitcoin mining industry.
- In April 2022, Prime Blockchain Inc., an infrastructure provider for blockchain technology, announced a definitive Business Combination Agreement with 10X Capital Venture Acquisition Corp. II to advance its focus on the blockchain ecosystem. Such instances will accelerate the growth of the Bitcoin technology market in the study period.
- Various companies in the market are investing in blockchain technology firms to facilitate the development of Bitcoin technology in North America. For instance, In May 2021, Mogo Inc., a digital payments and financial technology company, announced the purchase of approximately 146 Ether (ETH) at an average price of USD 2,780. Ethereum is an open-source, blockchain-based, decentralized software platform that uses its cryptocurrency, Ether.
- As the awareness of Bitcoin is increasing, the government in the region is taking the initiative to promote the usage of Bitcoin technology. For instance, in March 2022, the Canadian government allowed its citizens to use Bitcoin (BTC) as legal money in the country. It will help boost the bitcoin technology in North America in the future.
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