Cryptocurrencies have been around for more than a decade now. During this short period, the popularity of these digital assets has skyrocketed. Today, there are millions of crypto users, investors and traders, with thousands of new participants entering the market every day. As such, the global cryptocurrency market cap currently stands at whopping $818 billion, as per data from CoinMarketCap.
While this might sound like a significant figure, it pales in comparison to the global equity market. For instance, as of March 2022, the market cap of India’s equity market alone was valued at $3.21 trillion, and it is just one of the hundreds of other equity markets worldwide. As such, there is plenty of scope for crypto growth and adoption. But what factors influence the adoption of these digital assets, and can it be sped up? Let’s find out.
Awareness
The adoption of any technology depends on two key factors — technological awareness and behavioural intent. Behavioural intention is the willingness to adapt to a technological innovation, in this context, cryptocurrencies.
Acceptance of technology indeed starts with awareness, which then drives behavioral intent. A large section of the public has little to no idea what cryptocurrencies are and how they work. There is a glaring lack of formal or informal education on the subject.
As a result, cryptocurrencies have been limited among certain sections of society, usually those who have an interest in finance, fintech, and technologies that will drive the future. It is essential to raise awareness and educate people on a larger scale about blockchain and cryptocurrencies to make them future-ready.
Fortunately, there is a lot of progress being made in terms of crypto education. Schools and colleges worldwide are quickly incorporating modules on digital assets and their underlying blockchain technology.
Several exchanges and crypto platforms are also paying users to learn about cryptocurrencies and blockchain technology. These efforts should help spread awareness around cryptocurrencies and enkindle further adoption of these digital assets.
Utility and ease of use
There are more than 300 million crypto users around the world. The global population, on the other hand, recently reached 8 billion. Therefore, it is clear there is a glaring gap when it comes to the mass adoption of crypto.
Much of this stems from the difficulty of using cryptocurrencies and the lack of real-world utility. Most people need help understanding how cryptocurrencies work and how to use these digital assets. As a result, there is a general reluctance to use crypto.
Even after learning how to purchase and store cryptocurrencies, users struggle to find day-to-day utility for these digital assets. One cannot simply use cryptocurrencies to purchase goods and services, at least not as freely as fiat currencies. Fortunately, this is quickly changing. Several multinational brands and companies have begun offering crypto payment options, which will further spur the adoption of these digital assets.
Risks and regulations
There is a major concern surrounding the risks embedded in using crypto. Rampant scams and hacks have struck fear in the minds of new and probable users, who are now wary of investing in crypto because they find it risky. For instance, just this year, more than $3 billion worth of cryptocurrencies have been lost to hacks and attacks.
Moreover, digital assets have yet to gain explicit support from world governments. The state of regulatory affairs regarding crypto worldwide is confusing, to say the least. The fact that many governments have a negative/uncertain stance on cryptocurrencies is sure to deter mass adoption.
However, things are changing on this front as well. Governments have begun to acknowledge the utility of cryptocurrencies and their underlying blockchain technology. They are also creating regulatory frameworks to ensure user safety. Once these guidelines are in place, individuals may feel more comfortable using, investing and trading these digital assets.
Conclusion
Cryptocurrency is gaining ground and becoming popular with every passing day. However, there must be a severe development of the factors above to expedite the adoption process. It is expected that with further advancements in technology and better government support, mass adoption of cryptocurrencies will be a much smoother and faster process than it is now.
