The cryptocurrency market - Italy (2023)

1.2 The global market

The global cryptocurrency market size has been estimated at $*.** billion in **** and is expected to expand at an annual growth rate(***) of **.** percent from **** to ****.

Global market capitalization was valued at over $*** billion in ****.

Cryptocurrency utilizes distributed ledger technology such as blockchain to validate transactions. The increasing adoption of distributed ledger technology is expected to stimulate the growth of the cryptocurrency market during the forecast period. In addition, the increasing use of cryptocurrency for cross-border remittances is expected to fuel market expansion due to the reduction of consumer fees and foreign exchange fees.

Regardingend use, the commercial segment dominated the market in **** and accounted for more than ** percent of global revenue. Cryptocurrency trading allows users to buy, sell and examine asset balances and obtain deposit addresses.

Global cryptocurrency market size World, ****-****, billion dollars grandviewresearch.com

Commercial use

The data shown in the chart below concerns the size of cryptocurrency payment services in different countries around the world, broken down as a percentage. A prevalence of developing economies can be seen, which make up * of the top ** countries. All seven of these countries have someform of currency control, which highlights the use of cryptocurrencies as a frictionless means of avoiding restrictions ...

1.3 The Italian market

The "crypto" world, closely related to the Blockchain, experienced a difficult year in **** that led to the so-called cryptowinter, but despite this, Blockchain projects by companies and PA grew worldwide and also in Italy.

In relation to the Italian context, **** saw a marked increase in corporate Blockchain projects, with investments reaching ** million euros in ****, +**% compared to ****.

In ** percent of cases they are related to the financial and insurance sector, and in ** percent they concern retail and fashion, one of the main innovations in the blockchain field in ****.

The automotive and public administration sectors also stand out, with **% and *% of the market, respectively.

Investment in Blockchain Italy, ****-****, millions of euros automazionenews.co.uk

Cryptocurrency adoption

According to the report Global Crypto Adoption Index ****,cryptocurrency adoption in Italy last year increased by ** percent compared to ****. This is an important growth when you consider that ****, between financial exchange crashes and Bear Market, was really the worst year for the cryptocurrency industry. The data are particularly interesting because the metrics also calculate non-professional investor adoption and thus indicate that digital assets are gaining interest globally.

Last year's growth thus places Italy sixth in Europe as the largest market after the United Kingdom, Germany, France, ...

1.4 P2P exchanges of cryptocurrencies in different countries

The Global Crypto Adoption Index, mentioned in the previous sections, is calculated based on * sub-indices that relate to theuse of different types of cryptocurrency services. One index in particular concerns the volume of peer-to-peer (***) exchanges, weighted by PPP per capita and the number of Internet users.

P*P exchange volume makes up a significant percentage of all cryptocurrency activity in emerging markets. The objective is to highlight countries where more residents invest a larger share of their total wealth in P*P. The greater proximity to * signals the greater trading volume.

Italy does not feature in the top ** countries (***) on the Global Adoption Index, so it also records lower values in relation to trading than these countries.

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1.5 Impact of covid-19 and the Russian-Ukrainian conflict

Impact of covid-** on the cryptocurrency market

The advent of covid-** appears to have had a major impact on the cryptocurrency market.

At the time the pandemic broke out, Bitcoin, the world's first cryptocurrency, could be purchased for $*,***. By March ****, the same token was priced at $**,***, a remarkable *** percent increase . Other major cryptocurrencies, such as Ethereum, have also shown similar, if not greater, increases.This upward trend can be explained by the fact that cryptocurrencies can be traded from anywhere in the world, thus reducing the liquidity constraints that can arise if local governments restrict trading as part of a lockdown. In addition, investors, fearing that a crisis may lead central banks or political actors to interfere in the market, may prefer to shift their investments to the cryptocurrency market, which is decentralized.

However, such an upward trend is not necessarily a given, as several forces could have driven demand upward or downward as a response to the crisis. For example, potential investors manipulating the price of cryptocurrency, artificially increasing demand, or distrust of the crypto world that is often associated with criminal activities.

Instead, the crypto market seems to be flourishing as a result of the pandemic; in fact, the ...

2.1 Demand in Italy

Cryptocurrencies

According to recent data reported by Sole**ore , it can be seen that in addition to the different transaction volumes compared to other European states such as the United Kingdom, France, and Germany, there is a more pronounced lack of affection for diglital gold, namely Bitcoin (***), in Italy .

In **** , the capitalization of BTC relative to that of the entire market on domestic soil has plummeted from ** percent in **** to ** percent in early ****.

The remaining **% is dominated by altcoins, which were born on alternative blockchains that are more efficient and faster, less impactful on the environment, and have many available applications. BTC's dominance is likely to decline further in ****.

Among the Altoins, Ethereum (***), emerges as one of the most well-known and adopted cryptocurrencies on home soil, having also reduced energy consumption by ** percent.

Capitalization (***) in percentage breakdown Italy, ****, % cryptonews.com

In addition, interest in cryptocurrencies in Italy appears to be growing: more than * million Italians have already bought them and another * million say they are interested in doing so in the future.

Profile of cryptocurrency investors

As for Italians who invest in cryptocurrencies, according to Oam's **** Survey, these turn out to be overwhelmingly men at ** percent compared to ** percent of ...

2.2 Demand drivers

The following are the main reasons for people to invest in cryptocurrencies.

Opportunity for high gains

Cryptocurrencies have shown that they can generate significant gains over time. Bitcoin, for example, has gone from being virtually worthless to achieving high prices. This growth has attracted the attention of investors and speculators around the world. In general, such interest has matured within a very low interest rate environment that may have fueled a certain hunger for yield. This motivation was also noted in the OAM **** Survey, with ** percent of respondents saying they buy crypto to achieve high returns.

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Investment portfolio diversification

Investing in cryptocurrencies can be a form of portfolio diversification. In the investment world, diversification is, in fact, considered a prudent stretgia to reduce overall risk. Adding cirptocurrencies can be a way to achieve greater asset diversity, and this motivation is also prevalent among respondents to the OAM **** Survey, with ** percent agreeing.

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Technological innovation.

The blockchain technology behind cryptocurrencies is seen as revolutionary. In fact, it allows for the first time to transfer values peer-to-peer, that is, directly from one party to another. This means that it does not require an intermediary and therefore has the potential to fundamentally change ...

2.3 The geographical distribution of demand

According to the OAM Survey concluded in October **** on a sample of *** individuals residing in italy, the majority of investors in cryptocurrencies are located in the northern regions(***) is lower .

2.4 New trends in demand

Millennials, Gen Z and the attraction to digital finance

The younger generation turns out to be very attracted to the world of digital finance-they find it more accessible than traditional finance.

The appeal of cryptocurrencies and new blockchain-based technologies has captured Millennials and Generation Z. Many young people are proving inclined to invest in decentralized finance-also known as DeFi, Decentralized Finance.

Those who bet on Bitcoin, Ethereum and other altcoins, however, are not necessarily looking for immediate profit; they usually set long-term goals as well.Many are convinced that cryptocurrencies and blockchain are the future of finance.

This reality, described in a Financial Times article about the United Kingdom, is already present in Italy as well. "Millennials and in particular Generation Z are getting closer to the world of crypto, partly by nature and partly because many young people are driven to invest in the technologies closest close to their way of living and seeing the world, certainly more akin to cryptocurrencies and blockchain than more traditional investment options," Alessio Semoli, president of Prana Ventures, tells Linkiesta.

Moreover, these generations' interest in cryptocurrencies is not just a fad. It also has something to do with the future perspective offered by an ...

3.1 The operators in Italy

As for the Italian crypto players on the supply side, a list of the most important ones is proposed below, which also perform different types of services from each other.

Amaris is s.r.l:Established in ****, Amaris is an international consulting group specializing in technology and management. To date, it has more than ** offices around the world; in Italy, the office is located in Turin. It focuses on information technology consulting and its services are ** percent focused on blockchain technology.

Checksig s.r.l: professional investmentpartner in Bitcoin and cryptocurrencies, the trusted reference point for their management and custody.It provides custody and professional solutions for private traders, while it has secure and scalable solutions for corporations and institutional investors, ranging from corporate treasury allocation to a financial institution's crypto strategy. The operational office in Italy is located in MIlano and has been in operation since ****.custody and professional solutions for private investors

Conio s.r.l:Founded in ****, it is the fintech, participated by Poste Italiane and Banca Generali, that created the first multi-signature Bitcoin Wallet in Italy, with the mission of making digital assets accessible to everyone. Today, in addition to having reached more than ***,*** retail customers, it ...

3.2 The value chain

The following are the stages that generate value in the cryptocurrency industry, from development and generation to adoption and end use.

3.3 Distribution: exchange platforms

Data from the second quarter of **** confirm a rather concentrated structure of the exchange (***) market: in fact,**.* percent of customers operate with large exchanges, **.* percent on medium-sized operators, and *.* percent on small exchanges.

Through the large operators (***) transits the bulk of the euro countervalue of cryptocurrencies. Specifically, the balances of legal and digital currencies held at large exchanges are ** percent and ** percent of the total, respectively.

Percentage distribution of customers among exchange operators Italy, ****, % (***)

Regarding the use of such platforms in Italy, the top * in this respect are also well known in the world and among the most widely used:

Coinbase: a US-based cryptocurrency exchange platform founded in ****. it is designed to allow users to buy, sell, store and trade various cryptocurrencies securely and easily. It supports a wide range of cryptocurrencies, including Bitcoin, Ethereum, Litecoin and many others, offering users a variety of options for trading. Users can use Coinbase's digital wallet to store their cryptocurrencies. In addition to cryptocurrency trading, Coinbase offers other services such as Coinbase Pro for experienced traders, Coinbase Wallet for greater autonomy in managing their digital assets, and Coinbase Earn which allows users to earn cryptocurrencies while learning about them. Binance: is a global cryptocurrency ...

4.1 Supply analysis

Blockchain technology

To understand the cryptocurrency market, it is essential to know how the technology that enables digital currencies to exist works: blockchain technology

The blockchain is a distributed, decentralized, cryptographic ledger.

At its base we find theconsensus algorithm, whose task is to keep track of every transaction that takes place within the network. In fact, the distributed ledger is nothing more than a database of which there are many copies, each of which is stored at a node in the network.

The nameblockchaincomes from the fact that this database is divided into blocks (***) as they are created. These blocks are filled with information and, every so many years, are validated before closing and giving way to the next block. Within the blocks are imprinted the data of every transaction that took place in a given time frame, plus some header information. The latter provides continuity and preserves security, since it describes the current and previous block. This mechanism makes it so that, to change one block, all previous blocks must also be changed.

Because this is a distributed and decentralized technology, there will never be a single controller, several will be needed.

The relationship between blockchain technology and cryptocurrencies

The ...

4.2 The prices

The price trends of the most important cryptocurrencies in circulation are shown below.

Bitcoin

Bitcoin (***) trend World, January ****-November ****, in euros (***)

Ethereum

Trend of Ethereum (***) World, January **** - November ****, in euros (***)

Binance Coin

Trend of Binance Coin (***) World, January **** - November ****, in euros (***)

4.3 New supply trends

Blockchain *.*

Blockchain *.* technology is focused oninnovation. Speed, user experience, and usability by a larger, common mass will be the key areas it will focus on. One can divide blockchain *.* applications into two verticals:

Web *.*: The **** global financial crisis exposed the cracks in centralized control, paving the way for decentralization. Web *.* aims to create an autonomous, open and intelligent Internet will rely on decentralized protocols that blockchain can provide. There are already some third-generation blockchains designed to support Web *.*, but with the advent of Blockchain *.*, we can expect the emergence of more Web *.*-focused blockchains that will feature cohesive interoperability, automation through smart contracts, seamless integration, and censorship-resistant storage of P*P data files.

Metaverse: advanced artificial intelligence, IoT, AR and VR, cloud computing and blockchain technologies will come into play to create virtual reality spaces of the metaverse, where users will interact with a computer-generated environment and other users through realistic experiences.the centralized Metaverse entails more user involvement, deeper use of Internet services, and greater discovery of users' personal data. All of this most likely means greater exposure to cybercrime. Empowering centralized bodies to regulate, control, and distribute user data is not a sustainable solution for the future of the ...

5.1 The legislation

In Italy, the regulation of cryptocurrencies is still at a stage of development and adaptation, however, measures have already been activated in this regard.

Anti-money laundering

The regulation of cryptocurrencies, in the area of anti-money laundering, was introduced in our system by Legislative Decree No. **/****, and the subsequent by Legislative Decree No. ***/****, both implementing the Fourth and Fifth Anti-Money Laundering Directive of the European Union,which amended Legislative Decree No. ***/****. The consequence is that all entities involved in the exchange of virtual currencies are recipients of AML/CFT obligations. Exchange platforms and wallet service providers must register with the Organismo Agenti e Mediatori (***) compliance rules.

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Taxation

In Circular No. ** of Oct. **, the Internal Revenue Service clarifies details on the taxation of crypto-assets. As also underlined by the agency's press release, the practice document traces the European regulatory framework and sets the perimeter of the regulation (***). If the trading activity is infrequent, the gains are considered "miscellaneous income" and taxed at **%. If the trading activity is high, it may be considered a business activity and subject to taxation under the rules for business activities.

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Financial regulations

With the Budget Law **** (***), the main application of which is blockchain.cryptocurrencies are not ...

6.1 Segmentation

• Binance
• Coinbase
• Crypto.com
• Amaris is s.r.l
• Checksig s.r.l
• Conio s.r.l
• Young Platform s.p.a