There are many stories about cryptocurrencies and some believe that it will never really make it big. However, with the right steps in regulation and security, I believe it is not a matter of ‘if’ cryptocurrencies become 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 come about thanks to cryptocurrencies. As you know, cryptocurrencies are a type of digital money that is used as an alternative to the regular monetary system. The most famous cryptocurrency in the world is Bitcoin. Despite its increasing popularity, bitcoin is not yet seen as money, but as a medium of exchange. Investing in this virtual currency involves many risks, and the Dutch Financial Markets Authority actively warns about this. The first Bitcoin network was launched in 2009, and Bitcoin has seen massive growth since then.
There are approximately 1.6 million crypto-investors in the Netherlands, with approximately 570,000 people joining in 2021. It is a misconception that only teenagers and twenty-somethings 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. Often cryptocurrencies are bought on a cryptocurrency exchange, but this is no longer necessary.
Maxim Manturov, head of investment advisory at Freedom Finance Europe, says: “On the one hand, cryptocurrencies are becoming more deeply embedded in economic relations in the global economy. With their huge potential, crypto platforms are valuable long-term investments. But in the short term, investing in it. 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 sell-off in tech companies, including crypto exchanges.”
Due to the great interest in the Netherlands and the issue, the question is not if there will be an adoption of cryptocurrencies, but when it will happen. When is hard to predict. Due to the uncertain market – caused by high inflation and the war in Ukraine – there is a lot of 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 of mass adoption. By immersing yourself in cryptocurrencies now, you will benefit greatly later. This can be compared to the Internet: people who got there early have had a big head start.
Mass adoption for bitcoin?
When you invest in the current infrastructure and access issues, I think there’s a good chance there will be mass adoption. While many people say that cryptos are already mainstream, this is far from the case. Research from the AFM shows that of all Dutch people over the age of 18, only 8% own cryptocurrencies. That’s about 1.2 million people. So there is still a long way to mass adoption.
Cryptocurrencies can become mainstream when investors consider trading and buying cryptos safely, accurately and stably without the risk of their assets being stolen. And of course if there are fewer stories about crypto owners forgetting passwords and losing tons of money. If crypto enthusiasts can put these concerns to rest, opening and trading a crypto account can be as simple as opening a bank account.
But when will this happen? I expect that to happen when, as mentioned, investments are made in infrastructure and access issues. Solving these issues improves the current ecosystem and makes it more accessible to everyone. As news flies around about new currencies, NFTs and so on, we hear a bit about the companies working to ensure blockchains work seamlessly and securely.
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.
Little by little closer
Every day, in my opinion, cryptos get one step closer to mass adoption. It is good that it happens 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 the increasing popularity and stricter supervision, the mass adoption of cryptocurrencies is getting closer and closer. For mass adoption is necessary:
- Effective regulation, open attitude and improved technological knowledge among enforcers.
- Increased knowledge of technology and cryptocurrency regulations at financial institutions
- Solve infrastructure and access issues
- Offers customer-friendly crypto offerings to reduce complexity
In short: Dutch regulatory authorities must come up with initiatives for new legislation, and companies must invest in security, infrastructure and access issues. Concrete and effective rules help them to move forward. By increasing the knowledge of the technology and compliance of cryptocurrencies, appropriate policy can be made and risks can be mitigated.
About the author: Dmytro Spilka is the founder and CEO of Solvid.
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