Crypto Donations are Promoting Mainstream Adoption of Cryptocurrencies
Despite the rapid rise in cryptocurrency value, mainstream adoption seems to be a far-fetched dream. In a survey by Finder.com involving 2,001 American adults, it was established that only 7.95% of respondents owned bitcoin, with the majority being millennials as 17.2% compared to baby boomers at 2.2%. 92% of Americans have never owned cryptocurrency, with only 7.76% claiming they will purchase one in the future.
However, despite the low rates of crypto uptakes, especially in Europe and America, there has been an exponential growth in cryptocurrency participation among individuals. Coinbase, the largest cryptocurrency exchange in the US, reported a significant growth in its users currently at about 35 million, with tens of thousands of new users signing up each day.
A factor promoting widespread crypto acceptance is donations. The rise in the number of charity organizations accepting cryptocurrencies as a form of donation has significantly contributed to a steep rise in cryptocurrency use worldwide.
Data from Crypto Giving Tuesday indicates that more than 13 300 BTC and over $200 + million in cryptocurrencies have been donated to charities that have accepted crypto as a form of donation. As such, several crypto projects are employing crypto charitable donations as a means of promoting their projects. Here’s an insightful look into the growing world of crypto donations to the nonprofit sector.
Crypto Charitable Initiatives
Following the rise in the number of registered charity organizations, there has been increased competition for increasingly scarce donors due to challenging economic periods. To keep up with the intense competition, charity organizations look at innovative engagement tools for fundraising, one being cryptocurrencies.
Digital currencies offer a fast and transparent means of non-profit giving where fewer complexities are involved. Cryptocurrency donors do not have to pay capital gains tax and can write off the full amount of their donations.
Also, the changes in philanthropy in recent years necessitates charity organizations to accept crypto donations. The majority of donations to charity organizations come from a small group of extremely wealthy individuals. These individuals don’t always make donations in money.
Instead, they give out digital assets such as cryptocurrencies, stocks, bonds, etc. This approach of charitable giving benefits them in two ways. First, they offset income taxes since digital asset donations aren’t taxed, at least in most countries.
Secondly, donating digital assets such as bitcoin becomes more valuable over time than merely donating fiat currency, which never appreciates. Some organizations that have made huge crypto donations to charity include:
Pineapple Fund – Pineapple Fund was a group led by an anonymous individual to donate to charity. The philanthropy donated 5 057 bitcoin ($55 million at the time) to 60 charities. The organization made two of the top 3 largest BTC donations of all times: 320.8 BTC ($5.3 million) was donated to GiveDirectly, and 274.3 BTC ($2.1 million) were donated to the Institute for Justice.
Fidelity Charity– The organization received over $100 million in cryptocurrency donations channeled to non-profit organizations.
Givecrypto – Givecrypto raised over $4 million in cryptocurrencies for people living in poverty across the world. Also, Charity Water received 281.1 BTC ($1 million) from an anonymous donor.
Ripple – Ripple donated $29 million in XRP to the DonorsChoose charity fund. The company also contributed $50 million in charity to 17 universities as part of its University Blockchain Research Initiative. Additionally, its co-founder donated $25 Million in XRP to San Francisco State University.
Crypto Projects Using Donations to Facilitate Widespread Adoption
Amid the intense crypto giving, several crypto projects are using crypto donations to promote their coins. Every crypto project has one goal: to achieve mainstream adaptability and maintain its value over a long period.
To portray itself worthy or valuable and consequently be accepted by the masses, most crypto projects would fall for anything, be it extensive digital marketing or organizing bounties, giveaways, or airdrops.
And cryptocurrency donations are turning out to be an efficient and popular means by which crypto projects promote themselves—some of the crypto projects that have used cryptocurrencies as a means of promotion, including.
On February 1, 2018, Ethereum founder Vitalik Buterin donated $2.4 Million in Ether to the SENS Research Foundation-a charity funding research to treat age-related disease. The foundation was co-founded in 2009 by Aubrey de Grey, a gerontologist studying rejuvenating therapies to extend people’s biological ages.
Vitalik was quoted during the press release to be a huge fan of Aubrey’s research. He first read Aubrey’s book Ending Aging as a teenager. The SENS Foundation also received $3 million in BTC from the Pineapple Fund in 2017 and 2018. Vitalik Ether donation was largely viewed as a means of promoting mainstream adoption of ETH.
Ripple is the leading crypto project in regards to donations to charity. The project has donated close to $150 million in XRP to various charity organizations and universities. In March 2018, Ripple donated $29 million to DonorsChoose.org, a crowdfunding website that helps raise money for school and classroom projects.
In April 2019, Ripple co-founder and executive chairman Chris Larsen, his wife Lyna Lam, and non-profit foundation Rippleworks donated $25 million in XRP to San Francisco State University, specifically allocated to the University’s College of Business.
The donation was described as “the largest gift ever made in a digital asset” to a university in the US and was a continuation of Ripple’s University Blockchain Research Initiative, announced in June 2018. The initiative committed $50 million in resources, including funding, technical resources, and expertise, to 17 universities worldwide.
Following the donations, Ripple (XRP) went up by almost 13%, evidencing that the donations played a crucial role in promoting cryptocurrencies. Ripple also made.
Ripple also made crypto donations during the COVID-19 pandemic. The donations involved $100 000 to the COVID-19 emergency fund of Silicon Valley Community Foundation (SVCF) and $1 million to five local SFSF food banks.
While it’s a noble initiative, Ripple seems to be using donations to enhance XRP acceptability amongst its digital peers. The fact that the company can offer a huge amount of money to charity is a daunting feat but has been instrumental in promoting the coin to attract more value.
Increased launch of crypto projects, each targeting an almost similar audience, has seen increased competition in the crypto space. Many projects contest for acceptance as they tend to offer almost similar solutions to the same problems.
As such, crypto projects are turning to charitable giving to push for widespread acceptance and usability. For some crypto projects, non-profit giving as a means of promotion seemed to be working.