Did you know the richer you are, the more likely you are to own crypto? That’s according to a consumer study of crypto holders by PYMNTS. The crypto market is down (but holding steady) after the enormous highs in 2021. The people still holding onto crypto must see something good ahead for it, and crypto continues to innovate, so it’s hard to even imagine counting it out this early in the game.
Volatility is probably the biggest concern for many potential crypto investors, and certainly larger institutions. Institutions in particular value stability, and when you look at Bitcoin, with its 5-year low of $3,158 and 5-year high of $68,906, there’s certainly a lot of room for uncertaining.
But one thing that is certain for cryptocurrency in general is there is still a lot for crypto to do in the future. One of the largest networks, Ethereum, just underwent a game-changing transition from Proof-of-Work to Proof-of-Stake, and we’re still in the infancy stage for a lot of web3 and blockchain projects. One big advantage cryptocurrency has over traditional fiat money is its ability to adapt and innovate. It was created specifically for a modern world, to leverage the full potential of modern technology.
Of course, technology always changes, but the great thing about crypto, as Ethereum’s network upgrade showed, is that crypto can change with the times too. It’s able to adapt to new technology and improve its own systems to meet its goals.
Coindesk recently put together a report looking at several interesting crypto projects currently in the works and on the horizon, and it paints a very optimistic future for this burgeoning tech. One of the biggest early hurdles for crypto adoption was its difficulty of use. There was certainly a degree of tech-savviness required to even use Bitcoin back in the day, but now in 2023, we’re lightyears ahead of that and companies are continuing to innovate in this area. Mobile wallets are probably one of the biggest game-changers for crypto, and even as crypto-centric companies like Coinbase have been laying off employees, it’s impossible to deny how essential basic and easy-to-use payment systems are for crypto usage.
Other projects are looking to improve security, particularly in the wake of notable exchange collapses (and possible/likely scams) in the crypto world.
For many, though, the greatest promise of crypto is its decentralized nature. Being free from independent control or government intrusion, cryptocurrency not only gives people a high degree of financial freedom, but blockchain projects are looking at using the technology for democratic solutions to big problems. Through DAOs (Decentralized Autonomous Organizations), people are able to use the blockchain to empower communities.
Still, despite all the great things on the horizon for crypto, lots of people are still uncertain. Perhaps they are just waiting to see what world governments decide as many have started to signal the crypto crackdowns and regulations are on the way. The IRS recently provided guidance on paying taxes on crypto income, and senators have pushed for laws to prevent cryptocurrency being used for criminal purposes. There is still a lot for our society to figure out, and we are sort of in a transitory stage right now as governments (not just ours!) deliberate and work to pass laws governing the use of crypto.
Dr. Yan Zhang, co-founder of Pelago, put the blame for crypto’s downturn on regulatory uncertainty. He told PYMNTS, “It will take time to debate, but the industry is looking for certainty — these things are allowed, these things are not allowed, these things are temporarily not allowed.”
However, once regulations are finally agreed on, it should blow the doors wide open for crypto, bringing a lot of the stability larger investors and institutions require before being able to fully commit to what is still an emerging market.
Despite the uncertainty, it’s pretty clear to a lot of us that cryptocurrency is the future of currency. Because of the many advantages over traditional finance in our modern and rapidly advancing world, cryptocurrency is a great option for future-proofing your savings. It’s no wonder wealthy people are still holding on to so much crypto.
If you’re interested in getting started with a crypto investment or moving over your existing retirement account into a crypto account, download a free Digital IRA guide here.
Photo by Harrison Kugler on Unsplash