The Entire Blockchain Ecosystem in One Visualization
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The size of the bitcoin market may still be microscopic when contrasted with other global markets, but that hasn’t stopped the eight-year-old cryptocurrency, as well as the surrounding blockchain ecosystem, from evolving.
As Bitcoin Magazine points out in its article accompanying this infographic:
As Bitcoin approaches its eighth birthday, we see things changing. It is turning into that curious, wide-eyed technology with ideas as widespread as any normal eight-year-old. Cross-border payments, machine-to-machine transactions, smart contracts, microtransactions and stock settlements all have been discussed and developed. Nothing is off limits; no question goes unasked.
The blockchain, which is the technological infrastructure behind how Bitcoin transactions work, is now much more heralded in many circles than the original cryptocurrency itself. That’s because it is now clear how the blockchain can be further applied to many other disciplines, including payments, trading assets digitally, identity management, data verification, and smart contracts.
Venture capital has continued to pour into the sector to untap this potential.
In 2015 alone, companies focused on Bitcoin or the blockchain raised over $1 billion. Meanwhile, 2016 has already seen notable investments in companies like Augur, a decentralized prediction market, or Ethereum, a smart contract and publishing platform. As of today, than 65 banks and financial institutions have made investments in the industry in a wide range of businesses and ideas.
We pointed out in last week’s chart that mentions of “Bitcoin” have decreased by 61% in Y Combinator applications, which does raise a potential concern for the development of future Bitcoin and blockchain technology. Less startups focusing on the applications of the blockchain could be a sign of a slowdown, but it could also be temporary. Any significant breakthrough, like the anticipated success of OpenBazaar, could tip the scales back in favor again.
Even despite this potential setback, Bitcoin has always done well in the face of adversity. It was the top performing currency of 2015, and recently the bitcoin price has soared to 21-month highs after a recent four-day rally of 21%.
Based on this, it would seem that the blockchain ecosystem, including Bitcoin, is still alive and well.
Bitcoin is Near All-Time Highs and the Mainstream Doesn’t Care…Yet
As bitcoin charges towards all-time highs, search interest is relatively low. How much attention has bitcoin’s recent rally gotten?
Bitcoin Near All-Time Highs vs. Search Interest
Just about every financial asset saw a huge drop in March, but few have had the spectacular recovery that bitcoin has had since then.
Up more than 300% from the March lows, bitcoin is within $1,000 of its all-time high ($19,891) established three years ago. While 2017’s run-up saw a huge surge in Google searches, interest this time around is less than a quarter of what it was back then.
This graphic overlays bitcoin’s price changes against Google search interest for “bitcoin” between 2017-Nov 2020, showing the muted relative search interest for its recent rally. Despite Google search interest being low, it is turning upwards, potentially hinting at a rise to cap off 2020.
Nobody’s Searching? Maybe Bitcoin is Already Mainstream
Bitcoin’s mainstream attention in 2017 was exceptional, and was likely the first time many people had even heard about the digital asset.
After doing all of their Google research back then, it’s possible that the general population is now well aware of the cryptocurrency and doesn’t need to search up the basics again. Add to this that bitcoin is now easily purchasable through popular services like Robinhood and Paypal, and you have fewer people who need Google to figure out the intricacies of bitcoin wallets and transactions.
While people might not be searching for information on bitcoin, the media has certainly picked up on its movement over the past year. Mainstream coverage regarding the cryptocurrency is currently at a relative all-time high for the past 12 months.
Even if current mainstream coverage isn’t far from previous peaks, it’s still likely that people are seeing an increase in bitcoin content in their news feeds following the recent surge.
This rally is also attracting increased talk on social media sites like Twitter. That said, while there has been a rise in the volume of bitcoin-related tweets in November 2020, numbers are still quite low compared to the amount of tweets in 2017.
Daily tweet volume reached above 60,000 recently, but is still far from the +100,000 daily tweets that were being sent at the top of 2017’s bull run.
Where in the World is Google Search Interest for Bitcoin?
Even if worldwide search interest isn’t as high as it was in 2017, there is one country where bitcoin is being googled more now: Nigeria.
Since 2015, the Nigerian Naira has lost more than 50% of its value against the U.S. dollar. This, coupled with the country’s high share of unbanked citizens means that alternative currencies and payment methods have steadily risen in popularity and utility.
FinTech startups like Chipper Cash are providing Nigeria and other African nations with no-fee P2P payment services, along with the ability to trade bitcoin. The service is also beta testing the buying and selling of fractional shares of popular U.S. stocks.
Started up in 2018, Chipper Cash’s monthly payment values are now over $100 million, and the company has attracted investment from top VC funds like Bezos Expeditions as they provide a valuable service in an emerging market.
If Bitcoin is Mainstream, Where Does It Go From Here?
While bitcoin is proving itself to be a useful medium of exchange around the world, it’s still primarily a speculative asset. As 2020 saw massive increases in money supply across the board, bitcoin reacted best compared to other speculative assets, with its ascent to $19,000 almost completely uninterrupted since the $10,000 price area.
Time will tell if 2017 is set to repeat itself, or if bitcoin is getting ready to set new all-time highs going into 2021.
Mapped: Cryptocurrency Regulations Around the World
Cryptocurrency regulations are essential for the future of digital finance, making it more attractive for businesses, banks, and investors worldwide.
Mapped: Cryptocurrency Regulations Around the World
Following the unprecedented cryptocurrency boom in 2017, investors and governments alike could no longer ignore the growth of decentralized finance.
The world has become increasingly fascinated with cryptocurrencies and the ways they are enabling greater access, such as being able to send funds to remote places or securing capital for small businesses.
To aid this, cryptocurrency regulations are being slowly introduced into global financial markets. Regulations help to monitor these emerging digital currencies, and to allow for clearer guidelines and a measure of security.
The Regulatory Landscape
Today’s graphic from ComplyAdvantage maps out major regulatory cryptocurrency and exchange landscapes around the world, showing how sentiments towards digital currencies are evolving.
To do this, ComplyAdvantage measured cryptocurrency regulatory environments using their own Light-to-Tight scale, based on the following criteria:
- Cryptocurrencies and exchanges status? (Ban = 3 points, Regulated = 2 points, Grey Area = 1 point)
- Cryptocurrency considered legal tender? (Yes = 1 point, No = 0 points)
- Planned legislation to increase crypto regulation? (Yes = 1 point, No = 0 points)
Which jurisdictions have the strictest and most relaxed regulations for cryptocurrencies?
Regulations by Region
Global attitudes towards the rise of cryptocurrencies have shifted greatly over the past few years. While the term cryptocurrency is a bit of a misnomer, some countries do consider digital currencies legal tender, with many viewing cryptocurrencies as commodities.
Below is a table of the major countries that are pursuing cryptocurrency regulations:
|Country||Cryptocurrencies||Exchanges||Initial Coin Offerings (ICOs)|
|Australia||Legal; treated as property||Legal, must register with AUSTRAC||Regulated|
|Switzerland||Legal; generally accepted as payment||Legal, regulated by SFTA||Regulated|
|Malta||Not legal tender||Legal, regulated under the VFA Act||Regulated|
|Estonia||Not legal tender||Legal, must register with the Financial Intelligence Unit||Regulated|
|Gibraltar||Not legal tender||Legal, must register with the GFSC||Regulated|
|Luxembourg||Not legal tender||Legal, must register with the CSSF||Regulated|
|Canada||Not legal tender; some retailers accept as payment||Legal, regulation varies by province; final federal regulations expected late 2019||Regulated|
|Mexico||Legal, accepted as payment in some contexts||Grey area; first crypto exchange in opened mid 2019||Regulated|
|Lithuania||Not legal tender||Legal, must register with the Lithuanian Finance Ministry||Grey area|
|United States||Not legal tender; some retailers accept as payment||Legal, regulation varies by state; SEC expected to publish updated crypto regulations late 2019||Grey area|
|UK||Not legal tender; considered assets||Legal, registration requirements with FCA||Grey area|
|Russia||Not legal tender||Grey area; regulations to be determined by the end of 2019||Grey area|
|Japan||Legal; treated as property||Legal, must register with the Financial Services Agency||Grey area|
|Nigeria||Legal||Grey area; regulations upcoming from Central Bank of Nigeria||Grey area|
|Singapore||Not legal tender||Legal, no registration required||Grey area|
|South Korea||Not legal tender||Legal and regulated, must register with FSS||Banned|
|India||Not legal tender; digital rupee may be in the works||Effectively illegal, but global and federal regulations being considered||Banned|
|China||Bitcoin considered property; all other cryptocurrencies banned||Illegal, but a global regulatory framework being considered||Banned|
Japan has one of the most progressive regulatory climates for cryptocurrencies, widely considering bitcoin as legal tender and passing a law in mid-2017 recognizing cryptocurrencies as legal property. In late 2018, Japan also approved self-regulation for the crypto industry.
By contrast, China currently has one of the most restrictive environments in the world for cryptocurrency. China banned bitcoin transactions in 2013, as well as ICOs and crypto exchanges in 2017─though many have found workarounds through sites not yet firewalled.
Cryptocurrency and exchange regulations in the EU are determined by individual member states, and are considered legal across the bloc.
Digital currency offers great promise, through its ability to reach people and businesses in remote and marginalized regions.
—Christine Lagarde, Managing Director of IMF
Perhaps unsurprisingly, Switzerland has one of the most open climates for cryptocurrencies and exchanges in Europe. In 2016, the city of Zug, known as “Crypto Valley”, started accepting bitcoin as payment for city fees. Swiss Economics Minister Johann Schneider-Ammann announced his goal in 2018 to make Switzerland the world’s first “crypto-nation”.
Both Canada and the U.S. take a similar approach to cryptocurrency legislation at the federal level, as both countries view cryptocurrencies as securities. However, provincial and state regulations differ widely in their taxation requirements of profits from crypto investments.
Regulations throughout Latin and South America run the full legislative spectrum.
- Bolivia: unilateral ban on cryptocurrencies and exchanges
- Ecuador: the first country to launch its own token; ban on all cryptocurrencies aside from its government-issued SDE token (Sistema de Dinero Electrónico = electronic money system)
- Mexico, Argentina, Brazil, Chile: cryptocurrencies widely accepted as payment
- Venezuela: cryptocurrencies widely accepted; this makes sense, considering the economic crisis and subsequent freefall of the bolívar
The Importance of Cryptocurrency Regulations
Cryptocurrency’s journey is the story of a technology rapidly outpacing the laws that govern it.
Governments around the world are keenly aware of this problem. Members of the G20 published a request in June 2019 for a global regulatory framework for cryptocurrencies to be implemented to better manage the benefits and challenges that cryptocurrencies bring.
Regulation for both cryptocurrencies and crypto exchanges is essential for the future of digital finance─bringing legitimacy to the digital financial market, and making it more attractive for new businesses, established banks, and investors worldwide to more easily conduct business within this emerging ecosystem.
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