Despite Bitcoin’s Growing Presence in Financial Markets, Global Adoption Remains Relatively Low

Despite Bitcoin’s growing presence in financial markets, global adoption remains relatively low, with only 4% of the world’s population holding BTC.

Despite Bitcoin's (BTC) increasing footprint in financial markets, a new report from Bitcoin financial services firm River indicates that global adoption remains relatively low, with only 4% of the world's population currently holding the digital asset.

The U.S. leads in Bitcoin ownership, with an estimated 14% of individuals in the country holding BTC, according to the report titled "Bitcoin Futures: The Final Frontier." Other regions, such as Canada and China, show varying degrees of adoption, ranging from 10% to 1.6%.

Among major economic zones, North America showcases the highest adoption rates among both individuals and institutions, while Africa lags behind, with 1.6% of the population engaging with Bitcoin.

Moreover, River's analysis suggests that Bitcoin's overall adoption is still in its infancy, reaching just 3% of its potential global adoption level. This calculation considers Bitcoin's total addressable market, encompassing institutional participation, corporate holdings, and government allocations—currently minimal, amounting to just 1%.

Furthermore, the firm notes that institutions and individual ownership rates are likely understated in its assessment, further highlighting the significant potential for Bitcoin adoption to increase.

As the administration pivots toward crypto, economists warn of the risks to U.S. financial dominance.

The Trump administration's surprising pivot toward cryptocurrencies could have major implications for the U.S. dollar and the country's financial standing in the long term, according to economists.

During his presidency, Trump expressed skepticism towards Bitcoin and other digital currencies, famously comparing them to "a scam" and linking them to illegal activity. However, in the final months of his term, there was a shift in attitude.

This change was partly due to the influence of economists like Steve Mnuchin, who came to view crypto as a potential tool for U.S. financial innovation and dominance.

With China clamping down on crypto and showing interest in its own digital currency, Mnuchin and other administration officials began to see an opportunity for the U.S. to take the lead in the evolving landscape of money.

This pivot was also driven by bipartisan support in Congress for crypto regulation and the growing mainstream acceptance of Bitcoin and other digital assets.

While the administration did not introduce any significant legislation on crypto during Trump's term, the administration officials' statements and actions suggest a growing awareness of the importance of crypto in the U.S. financial system.

This pivot could have lasting consequences for the dollar and the U.S. financial system, economists say.

"If the U.S. does not adapt to the changing tides of finance and technology, it could lose its status as the world's leading economic power," said Paul Krugman, Nobel laureate in economics.

Krugman and other economists have argued that the dollar's dominance is largely based on a "network effect"—a self-reinforcing cycle where more people using the dollar leads to even more adoption.

However, they say this dominance is not guaranteed and could be threatened by new technologies and economic shifts.

"The U.S. is not immune to the same forces that have toppled empires throughout history," said Michael Pilhoffer, an economist at Deutsche Bank.

Pilhoffer and other economists say that China's economic rise and technological advancements pose a challenge to U.S. financial hegemony.

China has been investing heavily in research and development, and its technological capabilities are rapidly catching up to those of the U.S., they add.

"If China manages to create a successful digital currency and gains significant global adoption, it could siphon off demand for the dollar and reduce the U.S.'s influence in the global financial system," Pilhoffer explained.

This scenario could unfold if major institutions and countries decide to hold a portion of their reserves in the Chinese digital currency, diverting some of the demand currently directed towards the dollar.

"It would be a gradual process of erosion, not an immediate collapse," Pilhoffer noted.

The Trump administration's pivot towards crypto might be a desperate attempt to retain U.S. financial dominance in the face of these challenges.

But some economists remain skeptical.

"It's a bit late in the game," said Lawrence Summers, former U.S. Treasury secretary. Summers is skeptical that crypto can solve the major macroeconomic problems that the world economy faces.

"We're in the midst of a debt crisis, a productivity downturn, and climate change—problems that require large-scale government intervention and cooperation, not a new class of financial assets."

Despite these concerns, the Trump administration's pivot towards crypto signals a growing recognition in the U.S. of the importance of innovation and adaptation in maintaining economic leadership. As the world financial order continues to evolve, the role of crypto will undoubtedly be a subject of ongoing debate and analysis among economists and policymakers.output: Despite Bitcoin's (BTC) increasing footprint in financial markets, a new report from Bitcoin financial services