How the Cryptocurrency Market is Evolving

The UK has a variety of cryptocurrency companies that have appeared, and who are seeking to prosper in a global market that stands at £1.8 trillion.

The global cryptocurrency market already stands at $2.48 trillion (£1.8 trillion) and is expected to reach double digits in the coming decade.

As Webopedia notes, the most recognised form of cryptocurrency, Bitcoin, was created in 2008. The value of one Bitcoin skyrocketed from about $800 (£585) in January 2017 to over $45,000 (£32,900) in August 2021. While Bitcoin may be the most well-known and used form of cryptocurrency, it certainly doesn’t have a monopoly on the cryptocurrency market. There are now more than 1,000 forms of cryptocurrency on the internet today, and popular alternatives to Bitcoin such as Litecoin (developed in 2011), Ripple (2012), Dash (2014) and Ethereum (2015) have all attracted attention and market capitalisation in recent years.

In this wave of cryptocurrency fever, no country can stay untouched, not even the UK. The country was one of the few that saw the potential in investing in crypto markets. The advent of Bitcoin in 2008 brought plenty of action to London’s streets with numerous cryptocurrency startups.

Changes in the UK’s Cryptocurrency Sector

One of the first entities to lead the UK’s crypto market was Bitstamp. The firm has had a variety of addresses in the UK, but is now officially based in Luxembourg, according to LinkedIn. It holds the record of the world’s longest-running cryptocurrency exchange since 2011. Bitstamp platform trades in Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash.

In the same year, London-based Blockchain was launched by Benjamin Reeves and Peter Smith. The duo created Blockchain to buy, send, secure and even borrow digital currencies.

Later on saw the arrival of Elliptic, a crypto-asset risk management solution; and Humaniq, a digital assets firm that wants to “eradicate poverty”. Since then, London has accorded ‘unicorn’ status to several crypto-based startups.

Keeping in mind the potential benefits of cryptocurrency, Scotland’s Zumo launched its Crypto as a Service platform ZumoKit for financial institutions. In 2014, Dmitry Lazarichev created Wirex – a hybrid banking entity intending to equalise crypto and traditional currencies. Then came SatoshiPay, a B2B cross-border micropayment solution. The platform says it reached its zenith last year after a breakthrough deal with Germany’s Bankhaus von der Heydt. With the agreement, SatoshiPay became the first euro-backed stable coin (EURB) user.

In 2015, Electron focused on the energy sector through a distributed ledger. The entity incentivises decarbonisation of carbon-intensive platforms through market-based interactions. With time, the UK’s crypto market saw many ups and downs. However, the sector seems to strengthen despite controversies surrounding cryptocurrency globally.

Seven years after Bitstamp, CryptoUK, a self-regulatory trade association representing the crypto asset sector, was launched. The union was formed to counter the resentment against the crypto sector and educates users about the industry. CryptoUK is currently developing an appropriate crypto-asset operating framework to help the government.

This week PayPal launched a new service enabling its customers in the UK to buy, hold and sell cryptocurrency. Customers can choose from four types of cryptocurrencies – Bitcoin, Ethereum, Litecoin and Bitcoin Cash. This development marks the first international expansion of the company’s cryptocurrency offering outside of the US.

Cryptocurrencies, COVID and a Clampdown

Paydock uses blockchain technology to offer payments in the B2B sector. The firm started in Australia and since expanded into the UK – and now lists London as its HQ. The B2B crypto market is now looking towards the elimination of intermediaries. Cryptopay is a wallet and payment platform where merchants and consumers can make transactions with each other “while also being backed by the new Bitcoin payment protocol”.

eToro is a familiar name and acts as a social trading and investment network. Coinbase is another well-known name, and is a digital currency wallet and platform. The company is based in Delaware in the US, but operates in the UK.

In London, Coinrule has words to say on its ambitions: “By injecting liquidity to previously illiquid classes, cryptocurrency trading has enabled an immense wealth creation.” Coinrule uses algorithms and AI technology to automate cryptocurrency trading platforms. Also in the same city, Protean Risk offers risk management with digital asset insurance for firms. People can also use virtual currenciess to fund real estate development in the capital via the ‘X Real Estate Development’ (XRED) project.

The coronavirus pandemic has already forced governments and businesses to accelerate their position on cashless transactions. Accenture forecasts that 11.6 billion transactions in the UK will go digital by 2023. However, cryptocurrency has attracted some controversy in a short span. The UK banned Binance, the world’s largest cryptocurrency market, earlier this year. The Financial Conduct Authority (FCA) said that Binance “is not permitted to undertake any regulated activity in the UK”. Binance withdrew its applications to register with the FCA due to not meeting anti-money laundering requirements.

But after the clampdown by central authorities, UK residents can still purchase and sell cryptocurrencies via Binance. Crypto’s decentralised nature makes it arduous for governments to stop the free movement of crypto. Despite the FCA’s ban, the market is largely unfazed, and the top two cryptocurrencies, Bitcoin and Ethereum, rose by roughly 4% and 9% respectively within 24 hours of the ban.

Such a crackdown seems to be no hindrance for the constantly evolving crypto market in the UK. The Bank of England is in talks with the Treasury to launch a centrally-administered digital currency touted as ‘Britcoin’. Crypto assets require a suitable infrastructure for smooth functioning. For example, BSO offers a cryptographic infrastructure in the telecom, gaming and healthcare sectors.

The UK needs to be constantly revamping if it wants to remain in the mainstream of a continuously changing global scenario.

The Way Forward

The debate is no longer about cryptocurrencies’ survival. Rather, it is time to make sure the assets don’t displace into the wrong hands. The global crypto market has enormous untapped potential. With Bitcoin crowned as the fifth largest currency, beating the pound, the UK has a long road ahead before the cryptocurrency market reaches its saturation. The market represents the beginning of a new phase of digital transactions and technology. Britcoin (not Bitcoin) is corroboration of London’s positive response towards cryptocurrency, despite lurking skepticism.

Avya Chaudhary
Avya Chaudhary
Avya Chaudhary is an engineer turned writer and an ardent Potterhead. Currently associated with TechnologyAdvice as a freelance writer, Avya develops high-quality content for businesses. She also has a well-demonstrated history of working with NGOs and civil societies, and is currently pursuing her passion for community service and content marketing.
Get the Free Newsletter
Subscribe to Techrepublic UK for weekly updates from Techrepublic and eWEEK on the latest in UK top tech news, trends & analysis
This email address is invalid.
Get the Free Newsletter
Subscribe to Techrepublic UK for weekly updates from Techrepublic and eWEEK on the latest in UK top tech news, trends & analysis
This email address is invalid.

Popular Articles