There are many stories about cryptocurrency and some think it will never really get big. But with the right steps in regulation and security, I think it’s not a question of ‘if’ cryptocurrencies will be mass-accepted, but ‘when’.
In recent years, there have been many developments in the financial markets, especially in the technical part. This development has mainly occurred thanks to cryptocurrencies. Cryptocurrencies are, as you know, a type of digital money that is used as an alternative to the ordinary money system. The most famous cryptocurrency in the world is Bitcoin. Despite its growing popularity, bitcoin is not yet seen as money, but as a means of exchange. There are many risks associated with investing in this virtual currency, and the Dutch Financial Markets Authority is actively warning about this. The first Bitcoin network was launched in 2009, and Bitcoin has experienced massive growth since then.
There are approximately 1.6 million crypto investors in the Netherlands, of which approximately 570,000 people have joined in 2021. It is a misconception that only teenagers and some twenty people own cryptocurrencies. Today, people in their thirties and forties are also investing in the digital currency. This market still has great potential and 470,000 people are still considering investing in Bitcoin. Cryptocurrencies are often purchased on a cryptocurrency exchange, but it is no longer necessary.
Maxim Manturov, head of investment advice at Freedom Finance Europe, says: “On the one hand, cryptocurrencies are deeply embedded in economic relations in the global economy. With their enormous potential, cryptocurrencies are valuable long-term investments. But in the short term, it is risky to invest in “This year was a year of interest rate hikes by central banks, especially the US Federal Reserve. Such actions by regulators are always accompanied by a sale by technology companies, including crypto exchanges.”
Due to the great interest in the Netherlands and the question, the question is not whether there will be an adoption of cryptocurrencies, but when it will happen. When is difficult to predict. Due to the uncertain market – caused by high inflation and the war in Ukraine – there is great uncertainty in the market and there is less money to invest in cryptocurrencies. But because of the benefits, I think there is a good chance that there will be a mass adoption. By immersing yourself in cryptocurrencies now, you will greatly benefit from this later. This is comparable to the internet: People who got there early have had a big head start.
Mass adoption for bitcoin?
When investing in today’s infrastructure and access issues, I think there’s a good chance there will be mass use. While many people say that cryptocurrencies are already mainstream, this is far from the case. Research from AFM shows that of all Dutch people over the age of 18, only 8% own cryptocurrencies. Converted, this is about 1.2 million people. So there is still a long way to go for mass adoption.
Cryptocurrencies can become mainstream when investors consider trading and buying cryptocurrencies safely, accurately and stably without the risk of their assets being stolen. And of course if there are fewer stories about crypto owners who forget passwords and lose tons of money. If crypto enthusiasts can alleviate these concerns, opening and trading a crypto account can be as simple as opening a bank account.
But when will this happen? I expect this to happen when, as mentioned, investments are made in infrastructure and access issues. Solving these problems improves the current ecosystem and makes it more accessible to all. While news flies around new currencies, NFTs and so on, we hear a bit about the companies working to ensure that blockchains work smoothly and securely.
In order for the mass adoption of crypto to take place, it is very important to invest in security. In this way, you ensure that consumers have confidence in the functionality of the entire transaction process.
A little after a little closer
Every day in my opinion, cryptocurrencies are one step closer to mass adoption. It is good that it is happening in small steps. First a good and secure infrastructure and only then make crypto mainstream. The crypto industry is working hard to ensure better adoption and consumers are starting to see more and more benefits. It is important that companies that bring crypto to ordinary citizens continue to solve the problems.
With increasing popularity and stricter surveillance, the mass adoption of cryptocurrencies is getting closer and closer. Mass adoption requires:
- Effective regulation, open attitude and improved technological knowledge among enforcers.
- Increased knowledge of technology and cryptocurrency rules at financial institutions
- Solve infrastructure and access issues
- Provide customer-friendly cryptocurrency deals to reduce complexity
In short: Dutch regulators must come up with initiatives for new legislation, and companies must invest in security, infrastructure and access problems. Concrete and effective rules help them move forward. By increasing knowledge about the technology and compliance of cryptocurrencies, an appropriate policy can be made and the risks limited.
About the author: Dmytro Spilka is the founder and CEO of Solvid.
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