Crypto donations could exceed $10 billion over the next decade

Cryptocurrency has been making waves in the financial world in recent years, and nonprofits are noticing its potential as a tool to modernize fundraising. Crypto donations are now estimated to reach $10 billion by 2034.

One of the main benefits of using cryptocurrency for fundraising is that it allows donors to give in a way that is both secure and anonymous. This is particularly important for donors who are concerned about privacy and security. That means they can give without worrying about compromised personal information. Additionally, because cryptocurrency transactions are processed quickly and securely, nonprofits can receive donations more efficiently than they would with traditional payment methods.

Another benefit of cryptocurrency is that it allows nonprofits to reach new audiences and engage with younger donors who are more likely to be tech-savvy and interested in innovative ways of giving. Many young donors are drawn to using cryptocurrency to support causes they care about. It is also in line with their values ​​of openness, decentralization and social responsibility.

Adoption Curve of Cryptocurrency Increases

To take advantage of this trend, some nonprofits are now accepting cryptocurrency donations and using blockchain technology to track their fundraising. For example, the United Nations Children’s Fund (UNICEF) launched a program called CryptoFund. It allowed donors to donate cryptocurrency to support its humanitarian work. UNICEF also uses blockchain technology to track donations and ensure they are used efficiently and transparently.

Other nonprofits are partnering with cryptocurrency companies to make it easier and more accessible. The Giving Block, for example, is a nonprofit that helps other nonprofits accept cryptocurrency donations. The Giving Block offers various services, including setting up cryptocurrency wallets. Also provide educational resources to donors and help nonprofits integrate cryptocurrency into their fundraising strategies.

One of the key benefits of partnering with organizations like The Giving Block is that it allows nonprofits to reach a wider audience of potential donors interested in cryptocurrency. By making it easy for donors to give in this way, nonprofits can increase the impact of their fundraising efforts and build long-term relationships with donors who passionately want to support their cause.

Raise funds using crypto donations

At the same time, cryptocurrency also helps young donors increase their influence by giving them a new way to invest in social causes they care about. For example, some nonprofits now offer cryptocurrency-based investment opportunities that allow donors to support specific projects and initiatives in a more targeted way. By investing in these initiatives, donors can help support social and environmental progress while potentially making a profit on their investment.

Such initiatives have led to an increase in the use of crypto, even in times of struggle, such as the ongoing war between Russia and Ukraine. In 2022, many non-profits began accepting crypto, despite turbulent markets. Meanwhile, donors from across the web3 ecosystem, including individuals, blockchain companies, NFT creators and DAOs, have come together to support various causes.

Crypto charity platform ‘The Giving Block’ was able to provide BeInCrypto with deeper insight on this topic. According to the platform, crypto philanthropy held firm in 2022 even as the top cryptocurrencies witnessed massive corrections in market cap.

Last year, over 1,000 organizations donated $125 million worth of cryptocurrencies via The Giving Block.

The team stated:

“In 2022, crypto donors collectively gave $172 per dollar of Bitcoin’s market capitalization. A 41% increase compared to the figure estimated for 2021 shows that the cryptocurrency giving trend remained stable in what was a turbulent year for the crypto markets.”

This metric is called the Crypto Philanthropy Adoption Index (CPAI).

Crypto donations played a significant role despite the unfavorable market conditions last year. With this in mind, how much more can cryptophilanthropy grow over the next ten years?

Forecasts for the next decade

Cryptophilanthropy has already shown significant growth in recent years. According to a report by blockchain research firm Chainalysis, the total value of cryptocurrency donations to charities tripled from 2019 to 2020, reaching nearly $400 million. This suggests a growing interest in using cryptocurrencies for charitable giving.

Meanwhile, as cryptocurrencies continue to outperform traditional asset classes and gain wider acceptance among institutional and retail investors, more individuals and organizations may make cryptocurrency donations, especially as charities become more equipped to accept and manage them.

BeInCrypto asked The Giving Block how high this number could go, and the team responded that crypto donations could reach $10 billion in a single calendar year by 2034.

Why crypto compared to cash?

Donors are increasingly choosing cryptocurrency over cash for several reasons. Here are some of the most common:

1. Tax benefits: One of the main reasons why donors choose cryptocurrency is that it can provide significant tax benefits. Cryptocurrency donations are non-cash assets and are therefore subject to different tax rules than cash donations. Donors can sometimes get a tax credit for the cryptocurrency’s fair market value at the time of the donation without paying capital gains tax on the appreciated value.
2. Security and transparency: Cryptocurrency transactions are secure and transparent, meaning donors can have greater confidence that their donations will reach their intended recipient. Blockchain technology makes changing or manipulating transactions almost impossible, ensuring that the donation goes where it is intended.
3. Availability: Cryptocurrency donations can be made quickly and easily without traditional banking systems. This means donors from anywhere in the world can donate to organizations they support without worrying about international bank fees or other complications.
4. Innovation: Some donors may choose cryptocurrency simply because it is a new and innovative way to donate. Cryptocurrency is a cutting-edge technology that is rapidly gaining popularity, and some donors may want to be a part of this trend.

Overall, cryptocurrency offers several benefits to donors, including tax benefits, security, accessibility, and innovation. As more people become familiar with this technology, we will likely see an increasing number of cryptocurrency donations in the future.