Over the past decade, cryptocurrency has grown from a niche concept into a mainstream financial phenomenon. The total market cap of cryptocurrencies grew from just $15 billion in early 2017 to over $3 trillion at its peak in late 2021, demonstrating the immense interest and growth in this new digital asset class.
While Bitcoin remains the most well-known cryptocurrency, there are now thousands of different cryptocurrencies built on blockchain technology. Cryptocurrencies enable fast, global, decentralized transactions without third party intermediaries like banks. The underlying blockchain technology also has many potential applications beyond digital currencies.
As cryptocurrency has grown, a whole new industry has developed around it. Many companies are now involved in areas like cryptocurrency exchanges, mining, financial services, analytics, software and hardware infrastructure to support crypto. Major financial and tech companies have also started embracing crypto and integrating it into their platforms.
This article will highlight some of the top companies involved in the cryptocurrency and blockchain industry today. Understanding these key players provides helpful insight into this rapidly evolving space.
1. Nvidia (NVDA)
Nvidia is a technology company that designs graphics processing units (GPUs) for the gaming and professional markets. In recent years, Nvidia GPUs have become very popular for cryptocurrency mining due to their high computational power.
Cryptocurrency mining requires specialized computers to solve complex mathematical problems in order to validate transactions on the blockchain. This process is computationally intensive and GPUs with their massive parallel processing power are well-suited for this task.
Nvidia’s flagship GPU architecture, Turing, offers a huge leap in performance over previous generations which makes them prized by cryptocurrency miners. The raw computing power of Turing GPUs such as the RTX 2080 Ti is very desirable for mining cryptocurrencies based on memory-hard hashing algorithms like Ethereum.
As the cryptocurrency market grew, demand for Nvidia’s high-end gaming cards surged dramatically. At one point during the 2017 crypto boom, Nvidia GPUs were almost impossible to find at retail stores due to stock shortages. While this created problems for gamers wanting to buy GPUs, it was a huge boost to Nvidia’s bottom line.
Nvidia has benefited from the crypto mining demand in recent years, but market volatility remains a risk factor. When cryptocurrency prices decline and mining becomes less profitable, demand for Nvidia’s GPUs can drop rapidly. However, with their state-of-the-art architecture and energy efficiency, Nvidia GPUs remain a top choice for cryptocurrency miners today.
2. Block (SQ)
Block (formerly known as Square) enables businesses to accept payments and manage operations with its commerce ecosystem. But Block is also a major player in the crypto space with its Cash App product.
Cash App allows users to easily buy and sell bitcoin with no fees. Users can transfer bitcoin to and from the app. Cash App also provides an investing feature for users to buy stocks and ETFs.
Block sees bitcoin and blockchain technology as having the potential to expand economic access and opportunity globally. In 2021, Block purchased over $220 million worth of bitcoin to hold on its balance sheet.
Block continues to build out crypto capabilities for Cash App and integrate bitcoin into its services. The company is betting that bitcoin and blockchain technology will play a key role in the future of finance and commerce.
3. PayPal Holdings (PYPL)
PayPal Holdings operates a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper payment methods like checks and money orders.
In October 2020, PayPal announced that it would allow its users in the United States to buy, sell and hold select cryptocurrencies including Bitcoin, Ethereum, Bitcoin Cash and Litecoin directly through PayPal.
This was a major move that opened up exposure to cryptocurrencies to PayPal’s vast user base. PayPal has over 350 million active accounts, which gives cryptocurrencies access to a huge new potential market.
PayPal does not currently allow users to transfer crypto outside of the PayPal system, but allows customers to make transactions using their crypto balances when checking out at any of PayPal’s 29 million merchants globally.
The ability to buy, sell, hold and pay with cryptocurrency directly on PayPal provides validity and trust to the crypto market for mainstream consumers. It also gives existing cryptocurrency holders more places where they can directly utilize their digital assets.
PayPal’s embrace of select cryptocurrencies is a positive signal for further mainstream adoption of digital currencies and payments innovation. As a trusted household name, PayPal can help bring cryptocurrencies into more common use for payments and transactions.
4. Coinbase Global
Coinbase Global is one of the largest and most well-known cryptocurrency exchanges. Founded in 2012, Coinbase has rapidly grown to serve over 98 million users globally.
Coinbase operates an online platform that allows users to buy, sell, transfer, and store cryptocurrencies like Bitcoin, Ethereum, and others. They aim to be the easiest platform for newcomers to the crypto space to use through their simple user interface.
Some key features and offerings from Coinbase include:
- Fiat-to-crypto trading – Users can deposit fiat currencies like USD and EUR to purchase crypto. This makes it easy for beginners to enter the market.
- Wallet storage – Coinbase offers secure online wallets to store cryptocurrency holdings. This removes the technical barrier of having to self-custody crypto assets.
- Debit card – Coinbase card allows users to easily spend crypto balances like a debit card for digital currencies.
- Earn rewards – Users can earn free crypto through Coinbase’s learn and earn program. This helps incentivize and educate new users.
- Over 100 cryptocurrencies listed – From major coins like Bitcoin and Ethereum to smaller altcoins, Coinbase supports a wide variety of digital assets.
- Prime brokerage – Coinbase Prime provides premium trading tools and services tailored for institutional clients.
Coinbase went public in 2021 through a direct listing with massive market excitement. It continues to be one of the market leaders for the industry by making crypto accessible to the mainstream public.
5. Silvergate Capital
Silvergate Capital Corporation specializes in financial services and infrastructure solutions for the digital currency industry. Based in La Jolla, California, it operates the Silvergate Exchange Network (SEN), a network of digital currency exchanges and digital currency-related businesses.
Silvergate provides institutional-grade tools and services to securely transfer U.S. dollars between cryptocurrency exchanges, custodians, and Over-The-Counter (OTC) trading desks 24/7/365. The bank serves over 1,300 clients including cryptocurrency exchanges, miners, investors, custodians, and global enterprises.
The Silvergate Exchange Network facilitates instant transfers of U.S. dollars between network participants, allowing digital currency exchanges to offer their customers fiat currency (typically USD) deposit and withdrawal options. This enables exchanges to focus on their core competency of digital asset trading rather than building out proprietary fiat transfer solutions.
With the SEN, cryptocurrency-related businesses can transfer U.S. dollars from their Silvergate account to the account of another SEN client, in real-time, any day of the week. This provides efficient liquidity for institutional digital currency investors.
Silvergate also offers commercial lending solutions to fund operations and expansion of digital currency companies. The company has quickly become a leading provider of financial infrastructure solutions and expertise in the emerging digital currency industry.
6. MicroStrategy (MSTR)
MicroStrategy is a business intelligence, mobile software, and cloud-based services company that provides software and services to enterprises.
According to BlockWorks.co, MicroStrategy holds 189,150 BTC ($8.7 billion) on its balance sheet, which awkwardly means its bitcoin is worth over $1 billion more than the actual company.
MicroStrategy adopted bitcoin as its primary treasury reserve asset to store value, rather than holding cash. The company believes bitcoin offers better inflationary protection and growth potential than fiat currencies.
MicroStrategy continues to acquire more bitcoin when they have excess cash. CEO Michael Saylor has been a vocal proponent of bitcoin and argues corporations should invest reserves in bitcoin rather than let cash depreciate from inflation.
By making bitcoin its primary corporate reserve asset, MicroStrategy accelerated institutional adoption and legitimized bitcoin as an alternative to cash for corporate treasuries. This was a pioneering move that inspired other companies to follow suit and put portions of their balance sheets in bitcoin.
Trends and Opportunities
The cryptocurrency industry is seeing exciting growth and development across several key areas:
Growing Institutional Adoption
Institutional investors like hedge funds, pensions, and endowments have started allocating significant amounts of capital into cryptocurrencies. For example, Harvard’s endowment invested in crypto assets through a digital assets fund. Large banks like Goldman Sachs have also set up crypto trading desks in response to client demand. This influx of institutional money lends further validation and trust to the crypto ecosystem.
Decentralized Finance (DeFi)
DeFi aims to recreate traditional financial systems like lending and trading using decentralized blockchains instead of centralized intermediaries. Total value locked in DeFi protocols has grown exponentially, crossing $100 billion in 2021. DeFi offers the promise of more accessible, transparent, and efficient financial services.
Non-Fungible Tokens (NFTs)
NFTs experienced a meteoric rise in 2021, with NFT art selling for millions of dollars. Brands, artists, and content creators are increasingly experimenting with NFTs to represent digital ownership of assets like collectibles, art, music, videos, virtual real estate, sports highlights, and more. NFTs expand business models and monetization avenues.
The growing traction across institutional adoption, DeFi, and NFTs highlights the expanding real-world utility and range of use cases for cryptocurrency and blockchain technology.
Challenges
The cryptocurrency industry faces some key challenges that need to be addressed for further mainstream adoption.
Regulations
Cryptocurrency currently operates in a gray area in terms of regulations. Many governments are still figuring out how to regulate and classify cryptocurrencies. Stringent regulations could restrict innovation and adoption. However, balanced regulations could also provide more legitimacy and trust for cryptocurrencies.
Security
Cryptocurrency exchanges and wallets have been prone to security breaches resulting in theft of funds. As cryptocurrencies grow, cyberattacks may increase making security a key priority. Advanced encryption, cold storage, multi-factor authentication and other security measures need to be implemented to secure people’s investments.
Volatility
The prices of cryptocurrencies have been very volatile since their inception. Dramatic price swings make it difficult to assess the real value and use cryptocurrency as a medium of exchange. As the market matures, volatility may decrease but it continues to make many risk averse. Stablecoins pegged to fiat currencies can provide an alternative.
Overall, addressing these challenges will allow cryptocurrencies to gain more mainstream traction and better fulfill their potential as an innovative technology. But the industry is still young and has time to develop solutions.
Conclusion
As we have seen, the cryptocurrency industry continues to grow and evolve rapidly. Companies like Nvidia, Block, PayPal, Coinbase, Silvergate Capital, and MicroStrategy have established themselves as major players in this emerging space. Each is contributing in their own way to the development of cryptocurrency and blockchain technology.
There are certainly challenges ahead as governments grapple with regulation and the market deals with volatility. However, the outlook for cryptocurrency remains bullish. As more institutional investors get on board and new use cases emerge, we can expect to see further mainstream adoption. Crypto is clearly here to stay and will likely become an increasingly important part of finance and technology in the years to come. These companies have positioned themselves well to capitalize on this growth.
While the future is unknown, the crypto industry shows immense promise. With thoughtful regulation, technological innovation, and pragmatic leadership, these companies can help realize the full potential of cryptocurrency and blockchain. The next decade promises to be an exciting time in this rapidly evolving space.
