ByHeather Taylorguvendemir / Getty Images/iStockphoto
What do you know about cryptocurrency? GOBankingRates recently surveyed 1,037 Americans to find out if they actively invest in crypto, and findings revealed that 60% do not because they don’t understand it.
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Not understanding crypto is fairly understandable. The digital currency ecosystem is still fairly new and is often described as volatile in nature, especially compared to more traditional forms of investments. But are people gradually becoming more comfortable investing in crypto or do they hesitate to familiarize themselves with the technology?
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GOBankingRates spoke with investing experts in the decentralized finance space to find out what’s making it easier to invest in digital currencies.
Crypto Is a Mainstream Asset Class
According to a market sizing report from Crypto.com, the total crypto users worldwide will reach 1 billion by the end of 2022. It’s a significant growth trajectory from the start of 2021 where crypto only had 106 million global users and implies that more people are becoming comfortable investing in cryptocurrency.Building Wealth
Ryan Hansen, head of sales at Mercury Digital Assets, said heightened visibility is helping crypto become more mainstream. There are notable institution names, like Fidelity and Goldman Sachs, entering the space. Celebrities like Tom Brady and Steph Curry are shown during primetime media spots endorsing crypto brands. You can even see entities like Coinbase listed on stock exchanges.
The more visibility, coupled with the amount of time cryptocurrency has been around, is lending the digital currency greater measures of credibility.
“It’s not going away when some folks cried ‘bubble,'” said Hansen. “The heightened visibility of these happenings is not only a great marketing vehicle but also helps to build trust.”
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Bitcoin Is ‘Digital Gold’
Neil Bergquist, CEO and co-founder of Coinme, is a seasoned cryptocurrency investor and has been in the crypto industry for nearly 10 years. Bergquist said there’s a twofold reason why consumers should consider cryptocurrency, especially bitcoin. Crypto is a store of value and a medium of exchange.Building Wealth
“While people use bitcoin as a medium of exchange (i.e., payment method), we’ve seen the majority of the market use it as a store of value,” said Bergquist.
As a store of value, bitcoin is now being viewed as “digital gold” during this period of economic inflation. Bergquist said that because only 21 million bitcoin will ever be mined, it is regarded as a deflationary asset due to its limited supply. As a result, more investors are looking to invest in bitcoin as a store of value with many investors viewing a bitcoin purchase as their top reason for buying cryptocurrency.
It’s Becoming Easier To Understand
Many of the terms surrounding cryptocurrency, like DeFi, NFTs and blockchain to name drop a few, are confusing if you don’t know what it means. But a similar argument can be made about traditional investing terminology, such as mutual funds, 401(k) and the bear market.
“I think that the technology is becoming easier to understand, as an industry we are moving closer to digestible terms, better branding and messaging and most importantly easy to understand content that educates potential users on how to use blockchain,” said Yubo Ruan, CEO and founder of Parallel Finance.
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Tally Greenberg, head of business development at Allnodes, said the more media coverage, books and social media platforms take on the roles of educators and break down crypto concepts to the masses, it becomes easier for people to relate to cryptocurrencies. As more use cases for blockchain technology emerge every day, Greenberg said there is less talk about a “lack of intrinsic value” in cryptocurrencies.
It’s Easy To Invest
“Despite its volatile nature, high risk and uncertainty that stems from that, more people, especially young people, are getting on board with cryptocurrencies,” said Greenberg, who adds that investing and trading is easy and readily available in decentralized finance.
Not Investing Might Lead to FOMO
If nothing else entices you to invest in crypto, perhaps it’s the knowledge that (seemingly) everyone you know is trying it out.
“There is an almost viral effect once friends and family start participating and then tell contacts within their circle, who in turn feel more comfortable when a trusted personal contact is already involved, get curious and may have a little bit of FOMO,” said Hansen.
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About the Author
Heather Taylor is a senior finance writer for GOBankingRates. She is also the head writer and brand mascot enthusiast for PopIcon, Advertising Week’s blog dedicated to brand mascots. She has been published on HelloGiggles, Business Insider, The Story Exchange, Brit + Co, Thrive Global, and more media outlets.