“Crypto will do to banks what email did to the postal industry.”
Crypto has been on the rise ever since the dawn of 2020. While ten years ago, ‘crypto’ was largely an academic concept with most of humanity unaware of its existence, today it stands apart in the popular FinTech Unicorn race.
COVID-19 stimulated unprecedented lockdowns and economic depressions across the globe, but on the other side of the same coin, stood ideas and startups that transformed into unicorns! In comparison to fintech unicorns worldwide, crypto startups have witnessed an investor frenzy with their market valuation crossing billions every week!
Here’s the list of the largest Fintech Crypto Companies in 2022 by Market Capitalisation:
- Coinbase
With the highest market capitalization of more than $50 billion in the humongous club of Crypto Unicorns, Coinbase is an american crypto exchange platform that operates in the online space and has no physical headquarters.
- FTX
Founded in May 2019 and following the footsteps of Coinbase, FTX is a Bahamian based cryptocurrency exchange platform averaging $10 billion of daily trading volume and has over one million users. It has reached a market capitalization of $25 billion.
- FalconX
With a market capitalization of more than $3.5 billion and specialising in the field of blockchain, cryptocurrency and fintech, FalconX is a cryptocurrency brokerage and digital asset trading platform. It eliminates slippage and hidden fees through efficient application of data science by its platform.
- Liquid
Supported by Quoine, a Financial Technology company headquartered in Japan, Liquid is their core product and a highly sophisticated cryptocurrency trading platform facilitating fiats and dozens of cryptocurrencies. With a market capitalization of $3.2 billion, Liquid is one of the largest exchanges in Asia.
- Blockfi
A secured non bank lender and New Jersey-based financial services firm for crypto users managed to close its Series D funding round at a staggering $350 million in March 2021, setting its value at $3 billion.
- Bitso
With a market capitalization of more than $2 billion, Bitso is a Mexican cryptocurrency exchange founded in 2014. It is the first crypto unicorn in Latin America.
- Fireblocks
Founded in 2018 and with a market cap of more than $2 billion, Fireblocks is a platform that protects digital assets in transit, focusing on protecting the transmission of customers’ digital assets between exchanges, counter brokers, hot wallets, and cold stores.
- Mercado Bitcoin
Mercado Bitcoin describes itself as an alternative asset trading platform in Latin America and supports Brazilian Reals (BRL), offering BRL pairs for BTC, ETH, XRP, BCH, LTC, and USDC. This explains its market capitalization of $2.1 billion!
- CoinSwitch
Exclusively for the Indian market, CoinSwitch is an app-based cryptocurrency exchange which is available as a mobile application. With a market cap of almost $2 billion, it supports trade in 100+ cryptocurrencies including Bitcoin, Ethereum, Litecoin, Ripple, Dash and others using Indian Rupees.
- Ramp
With a mission to create an easily accessible connection between the open blockchain financial system and the old, closed banking system, Ramp connects blockchain with banks using open banking APIs. In 2021, it has a market capitalization of $1.6 billion!
Which countries do crypto unicorns come from?
While we hear news of countries like India drafting bills to accommodate crypto in their monetary system, at the same time, some countries have outright expressed their hostility towards it, for instance, China banning cryptocurrency in spite of rising crypto fans in the country. In such a scenario, as crypto’s popular face, Bitcoin, continues to attract mainstream attention, the crypto-centric startups are climbing the ladder of funding from Venture Capital firms and transitioning into ‘Unicorns’.
Crossing the $1 billion mark by leaps and bounds, the United States stands proudly as the ground zero of 10 new crypto unicorns in 2021. Finding their niche in the crypto space, India and Brazil have contributed with 2 crypto unicorns each; Singapore has contributed with one crypto unicorn, and even China have contributed to the global crypto space with 2 crypto unicorns!
The US is the largest economy in the world implying a large number of potential customers and revenue. With startup friendly policies and Silicon Valley- the heart of VCs, US offers capital;expertise and the environment supportive of companies aiming to find their niche in a relatively unexplored yet growing crypto market.
What are the Crypto trends for 2021-2022?
Crypto as a sector isn’t new, but the rising investor frenzy surrounding it has been the standout point of 2021 and will continue to be in 2022.
Some of the notable trends and developments are as follows:
- Institutional Adoption
There has been an institutional adoption of Crypto and there is also an increasing regulatory clarity observed. The declaration of Bitcoin as legal tender by El Salvador makes a good example.
- Integration of Blockchain and AI
The integration of blockchain and artificial intelligence has facilitated more security and preference to technological partnerships. Previously known as Facebook, ‘Meta’ has cryptocurrency projects underway like Diem and the recently launched Novi Wallet.
- Focus Beyond the Ability to Hold Crypto
Initially companies were focussed on how they could buy or hold crypto. Coinbase is a worthy instance of this and is now a unicorn.
- Decentralized Finance – A New Way of Thinking
The focus then shifted to Decentralized Finance (DeFi) wherein these companies attempted to recreate traditional financial models like being able to ‘loan cryptocurrency’ and ‘receive interest’.
- Foray of NFTs as the Face of Innovating in Crypto
This was followed by NFTs or ‘Non Fungible Tokens’ which have forayed in 2021. When it comes to innovation, the crypto space is yet to see a lot!
As mentioned earlier, FTX, the crypto exchange is valued at $25 billion. This is a fact. Well, the fun fact is it made its CEO a billionaire so much so that he rivalled Mark Zuckerberg’s wealth!
What is the Future of Crypto in the next 5 years?
The rising interest in investment in the crypto sector could lead to a great deal of diversification in the industry, for instance, NFTs could be used as collateral for people to take out loans: NFT DeFi. Another sub domain, stable coins, which has witnessed investor interest but at the same time, faces regulatory risk could see an increase in preference.
The following projections have been made regarding the growth of the crypto sector:
- According to Statista, the world is predicted to spend up to $15.9 billion in blockchain related tech by 2023.
- By 2026, the digital currency global market size will be around $1087 million. There will be a CAGR of 3.5% between 2021 and 2026.
With everything dependent on price movements and investor sentiment, the crypto market is a volatile one but it is like any other system trying to survive. Issues will develop but as long as they are resolved, the crypto market will take shape in the long run.
