Bitcoin outperformed every other reserve currency in 2016 by large margins. An increasing number of investors, traders and businesses have begun to recognize bitcoin as the world’s global currency, depending on bitcoin to protect their wealth from tightening regulations and the government’s excessive control over money. This surge in demand for bitcoin led to its increased global acceptance, with 1.1 million new wallets being created every quarter.
2016 so far has been the year of capital controls, war on cash, restriction of assets and decline of gold, which most investors and traders believed to be the global safe haven asset for decades. Amongst rapidly devaluing currencies and assets, bitcoin continuously demonstrated a strong performance in terms of adoption and market value, recording a consistent growth of over 1.1 million new wallets each three months since earlier this year.
Also read: Why Jim Harper Is Dead Wrong on Bitcoin
Bitcoin’s Rapid Growth, Increasing Adoption
Bloomberg recently revealed that bitcoin has seen a consistent growth in user base over the past two years. In 2016, the total number of bitcoin wallets on blockchain.info alone grew from 5.3 million to 11 million, adding 5.7 million new bitcoin wallets since January of this year.
Apart from blockchain.info, the most popular bitcoin wallet service provider today, other popular bitcoin wallet platforms have also reached significant milestones, with Coinbase reaching 5 million users in year-to-date.
The rapid increase in global awareness and adoption of bitcoin can be directly attributable to the market instability and economic struggle of most countries including India, China and the US amongst others. Particularly, two of the largest gold importers India and China have begun to ban gold importation and seize the precious metal at borders and airports — while some countries have imposed serious capital controls to crackdown on criminal usage of cash and outflow of money.
Capital Controls a Factor
As a result, Genesis Mining co-founder and CFO Marco Krohn told Bloomberg that he firmly believes the price of bitcoin will increase by 100% next year, as the user base of the digital currency continues to grow and the demand for bitcoin remains high in regions with heavy capital controls.
“My personal expectation is that bitcoin will at least gain another 100 percent,” said Krohn.
Security and bitcoin expert Andreas Antonopoulos also criticized the idea of governments solidifying their stance on restricting cash, describing cashless society as totalitarian society.
Cashless society is totalitarian society. Central database digital money puts everyone at the mercy of government, who can turn anyone off
— Andreas (@aantonop) December 14, 2016
If more individuals, investors, businesses and traders continue to develop awareness towards excessive control of government on cash and assets, the demand for decentralized currencies like bitcoin will rise even further, expanding the global user base.
Mainstream Media and Analyst Criticisms on Bitcoin Proved False Again
CNBC and many other mainstream media outlets criticized the slow growth of bitcoin’s userbase in 2015, stating that bitcoin would only have 5 million active users by 2019. Some consultants and analysts including Windsor Holden noted that bitcoin will not be able to hold up with the competition within the financial industry.
To my mind there are far more pressing needs for the retailers, there are so many other payment options emerging,” said Holden, head of forecasting and consultancy at Juniper.
More importantly, the study released by Juniper called “The Future of Blockchain”, which received mainstream media coverage, failed to predict the growth of bitcoin essentially by concluding that bitcoin would remain as a niche marketplace.
Holden, like other analysts, emphasized that payment networks from tech giants like Apple and Samsung would ultimately surpass the growth of bitcoin by appealing to the general population.
However, similar to most mainstream media predictions and analysis from research firms, this has proven to be false. Bitcoin has seen the registration of over 6 million new wallets in 2016 alone and as market instability worsens in 2017, bitcoin could well experience an explosive growth.
What do you think the growth of bitcoin’s userbase? Ready to bet? Let us know in the comments below.
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