Since the advent of cryptocurrency, one question has been plaguing proponents and haters alike: Will we see massive crypto adoption, and if so, when? Will we ever be able to walk down the street and buy a carton of milk with Dogecoin, take out an Ether mortgage, or finally get our hands on a delicious slice of that now-infamous Bitcoin pizza?

The importance of adoption is twofold. The first facet is ideological, as those in favor of cryptocurrency envision it as a superior replacement to our current fiat money system, as laid out in Satoshi Nakamoto’s whitepaper. The second reason for the importance of adoption is that it’s tied to the value of cryptocurrencies; more widespread adoption of a certain coin often translates to a higher price.

This is where most cryptocurrencies differ from the fiat system, as many of them have a hard cap on how many coins can be mined. As demand rises – and the number of coins that can be mined decreases – the price jumps up.

Here, we’ll take a look at the current state of cryptocurrency adoption and try to analyze trends that may help us predict what the next few years will look like for Bitcoin and other cryptos.

Types of Adoption
When talking about crypto adoption, it’s important to understand its different types and levels.

The first one, which we touched on in the introduction, relates to mass consumer adoption, where cryptocurrencies become a valid form of payment for goods and services we use every day. This kind of adoption seems the most faraway, and will probably represent the final stage of cryptocurrency’s development.

Institutional adoption, as the name implies, refers to various financial institutions adopting or investing in cryptos. These institutions could be international monetary ones, Wall Street investors, state bodies, or other private financial companies.

Company adoption is often used interchangeably with institutional acceptance. In this article, we use this term to designate the scale at which private companies start accepting Bitcoin or other cryptos as a form of payment for their services.

Lastly, there’s retail investor adoption – the rate at which regular people and small-time investors buy and trade with these digital assets.

The State of Institutional and Company Crypto Adoption
Over the past two years, cryptocurrencies have scored some big wins when it comes to institutional adoption.

The Good
One of the biggest positives for crypto has come courtesy of PayPal. In April 2021, the company announced that it would start accepting Bitcoin as a form of payment. More precisely, PayPal now allows users to pay with Bitcoin and other popular currencies upon checkout with various vendors. This came in the wake of PayPal enabling users to trade and store cryptocurrencies with their accounts. Since PayPal is an immensely popular online payment system, this represented a huge step towards mass adoption.

However, the company that has arguably done the most to popularize Bitcoin is Tesla. The company recently started to accept Bitcoin again, after stopping due to environmental concerns. Tesla CEO Elon Musk and his Twitter escapades are also known to have a massive impact on the price and adoption of cryptocurrencies.

Mastercard, one of the biggest credit card networks, has also started surfing the crypto wave. The first phase of Mastercard’s crypto adoption includes facilitating cryptocurrency transactions through its network. This change is yet to be implemented, and the exact cryptocurrencies the company will support have not been disclosed yet. Both Mastercard and Visa have put out dedicated crypto cards that allow for easier cryptocurrency spending and conversions.

When it comes to state actors, we recently saw El Salvador becoming the first country to declare Bitcoin legal tender. This was especially important because El Salvador is one of the eight countries outside of the US that uses the US dollar. As such, this was interpreted as breaking the country’s dependency on the dollar, the world’s most used currency and the one that is most often held up as an example of the fiat system and all its faults.

Additionally, El Salvador is expected to be the first pebble in an avalanche of countries accepting cryptos as legal tender. For example, there have already been whispers that Panama and Paraguay will be next to take this step.

The Bad

However, not everything is rosy for cryptocurrencies. When El Salvador decided to accept Bitcoin, the World Bank refused to help with the implementation. We also witnessed a massive crackdown on cryptocurrencies and mining in China, which triggered an exodus of mining companies to other parts of the world.

n the US, the status of cryptocurrencies remains tenuous. While miners flocked to the US after leaving China, the recent US infrastructure bill dealt a major blow to crypto fans. The $1 trillion bill contains an article that cryptocurrency brokers (exchanges and similar sites) report customers to the IRS, as this tax income is one of the funding sources for the infrastructure rebuilding project. On top of that, the recent wave of ransomware attacks extorting ransoms in crypto has corrupted many people’s perceptions of digital currencies.

However, we’ve also witnessed the creation of a cryptocurrency lobby, which seems more than capable of exerting political pressure to protect the industry’s gains.

Retail Investor Adoption

One segment where cryptocurrencies are definitely winning the fight is retail investor adoption. A recent study by Chain analysis showed that adoption among retail investors jumped by a jaw-dropping 881% over the past year.

This is pretty clear proof that more and more regular Joes and Janes have begun to recognize the potential of cryptocurrencies – they can be extremely lucrative, private, and great for getting around sanctions and blockades in developing countries.

According to the study, Vietnam, India, and Pakistan are now the countries with the most crypto activity. The US dropped from sixth to eighth place, while China fell from fourth to 13th.

Data on daily trading volumes at popular cryptocurrency exchanges also paints a clear picture of how popular cryptocurrencies have become.

What About Everyday Usage?

Even with all the interest from investors and institutions, we do not seem even remotely close to cryptocurrencies becoming a standard form of payment. The reasons are obvious. While cryptos can be ridiculously lucrative and often represent a bountiful – albeit extremely risky – investment, they’re still far too volatile to be used for everyday transactions.

A proper legal framework is also required for the safe and continual use of cryptocurrencies, and. With recent developments regarding regulation, the big question is now whether things will go the way cryptocurrency proponents would want them to.