TL;DR: It’s been a pivotal year since FTX rattled the crypto world. As the chapter closes with the rightful conviction of the person responsible, we at Coinbase are taking a moment to reflect on the resilience and continued growth of the crypto industry—a testament to its unyielding promise and utility.

Crypto is Dead, Long Live Crypto

The shockwaves from the FTX collapse reverberated through the crypto space, sparking scrutiny and propelling calls that "Crypto is dead.'' Yet, as we stand a year removed from the collapse of FTX and on the other side of the conviction, that narrative couldn't be further from the truth.

In the past year we've seen an uptick in institutional interest in the asset class through ETF filings, continued innovation of crypto technology by a dedicated developer community, increased levels of hodling rates which we believe indicate long-term conviction in the asset class, and an uptick in international regulatory frameworks for crypto. 

A Year of Growth and Adoption

Global Adoption: The user base for crypto assets is now estimated to be 420 million globally, with 52 million in the US alone. There are now 5x more Americans who own crypto than own electric vehicles and 3.5x more than belong to unions. The crypto market is predicted to continue to grow with a compound annual growth rate of 56.4% from 2019 to 2025.

Corporate Adoption: Over half of the Fortune 100 have embarked on crypto, blockchain, or web3 projects. Among them, financial institutions and Fortune 500 executives recognize crypto investment as essential to competitive advantage.

Traditional Finance Adoption: Financial titans are filing for Bitcoin ETFs, and poised to integrate crypto into the mainstream investment ecosystem. We’ve also seen payment integration with services like PayPal and Visa are bridging crypto with traditional finance.

Generational Adoption: Nearly two in five younger people (38%) say crypto and blockchain can increase economic opportunities for them in ways traditional finance can’t, and half of young people (51%) say they’re likely to throw their weight behind crypto-friendly candidates in 2024.

International Progress: 83% of the G20 and major financial hubs have either passed national crypto legislation or have crypto legislation in place or in progress including the passing of MiCA, a unified framework for crypto across 27 countries. 

Humanitarian Aid: This year saw multiple conflicts including the war in Ukraine which ranks 5th in the Chain analysis Global Crypto Adoption Index. When many Ukrainian citizens lost access to their credit cards and bank accounts this past year, they turned to crypto to buy food, access money, and seek safety in neighboring nations. At the same time, 100,000+ people from around the world leveraged crypto to donate over $100 million directly to the Ukrainian government’s crypto wallet, instantly and cheaply.

Building Through Noise: Coinbase Continues to Drive Crypto Utility

More than ever, consumers have needed a responsible, transparent, and compliant crypto exchange to offer trusted and secure products. In service of this over the last year Coinbase has obtained licenses that enable us to access new markets, continue to drive toward regulatory clarity for crypto, and built innovative products that expand the utility of crypto.

International Expansion: Coinbase expanded into Brazil, Singapore, and Canada in 2023 and started a global, compliant exchange.

Crypto Derivatives: Global derivatives market represents 75% of all trading volume. Trading volume that up until now was largely going through unregulated offshore exchanges. Coinbase Financial Markets has received regulatory approval from the National Futures Association (NFA) to offer Futures to eligible US customers via Advanced trading, and Coinbase International Exchange can now offer perpetual futures to non US customers internationally.

Launched Base, a next generation L2: Our L2 platform, Base, overcomes L1 inefficiencies, spurring developer adoption with tens of millions of NFTs and over $500 million in assets.

Supported Ethereum Merge: Coinbase supported Ethereum's shift to proof-of-stake, enabling unstaking within 24 hours of the Shapella upgrade, enhancing efficiency and cutting the network's carbon footprint by 99%.

We Need Clear Rules For Crypto to Protect Consumers in the US

The past year has been one of continued growth, adoption and progress for crypto in the United States. But despite this significant progress, the US still lacks meaningful guardrails to protect crypto customers. While policymakers publicly condemn FTX crimes and legislation to rein in bad actors and protect consumers has gained momentum, lawmakers have punted responsibility to unelected regulatory officials who have employed a regulation-by-enforcement approach that has driven innovation offshore and is spawning an environment that produces more FTX’s, not fewer. 

The American people deserve clear rules and will vote accordingly. The need for legislation that harmonizes consumer protection with innovation is critical. We stand with American crypto holders and their desire to make their voices heard and are proud supporters of movements like Stand With Crypto which are gaining momentum and amplifying our voices in Washington, D.C. We have confidence that the US will get this right, but we need to act fast to protect consumers and make sure innovation stays on America’s shores.

In Conclusion

The past year has solidified crypto’s place in the financial ecosystem. We've seen continued positive adoption trends, regulatory advancements abroad, and heightened interest from major financial institutions. The fall of FTX was not a death blow to crypto, it was traditional financial fraud plain and simple. Crypto is alive and well and has spent the last year showing remarkable resilience and continued growth, setting the stage for an even more robust future. In service of that future Coinbase will continue to lead by example, ensuring that the future of finance is built on a foundation of trust, innovation, and inclusion. The journey continues, and the best is yet to come.