Crypto winters don’t scare away investors – here’s why
Although the value of bitcoin has fallen by over 60% from the record highs of August 2022, this “crypto winter” does not reduce the interest in buying digital currency.
About 56% of consumers say they are at least somewhat interested in buying cryptocurrency in the next year, according to PYMNTS and BitPay’s “Pay with Cryptocurrency” survey in August.
Almost 42% of millennials say they are either very or extremely likely to buy crypto in the next year. For Gen Z, that number drops to about 26%.
What is behind the continued fascination with crypto? While nearly 50% of respondents are motivated by the opportunity to make money from their crypto investments, approximately 15% of respondents say that “fear of missing out” drives their decision.
“History has shown us that the market has defied all odds even in bearish periods, so investors remain bullish on bitcoin and cryptocurrencies’ ability to remain resilient,” said Iyandra Smith-Bryan, CEO of Quantfury, a global broker-dealer. which provides exchange spot prices on global and crypto exchanges.
In addition, faith in the underlying blockchain technology continues to fuel investors’ optimism about the use of cryptocurrency in the future, says Smith-Bryan.
Investors also tend to see the bottom of the crypto winters. “It eliminates the weaker players, leaving the best players on the field; giving the best players an opportunity to concentrate on advancing technology, product development and increasing support and service,” adds Smith-Bryan.
While many people hope to monetize their crypto holdings, many want to be able to use it to make purchases as well.
About 40% of 18- to 35-year-olds plan to use crypto to pay for goods and services this year, according to Checkout.com’s “Demystifying Crypto” report.
As the process of using crypto to make purchases becomes more seamless, “we’ll see hockey stick-like growth — much like the speed of growth on the Internet,” says Max Rothman, head of crypto and digital assets at Checkout.com.
Currently, the fluctuations in the value of many forms of cryptocurrency, such as bitcoin and ether, make it challenging to use as a payment method.
However, stablecoins, which are cryptocurrencies that are tied to the price of another asset such as gold, can provide both consumers and retailers with the price stability they seek, Rothman says.
Stablecoins “offer all the benefits of a digital asset—transparency, decentralized data, and instant availability of funds—but are better able to withstand the volatility of markets,” says Rothman.
Although interest in crypto remains high, there are real risks that should be taken into account.
Cryptocurrency is a highly volatile digital asset that is subject to unpredictable fluctuations in value. There are no guarantees of making money, which is why experts recommend investing only as much money as you are willing to lose.
Additionally, cyberthieves can sometimes hack the virtual wallets that store your crypto and steal your money, so it’s important to be extra vigilant about security.
Register now: Get smarter about your money and your career with our weekly newsletter
Don’t miss: Did you receive a text message from the wrong number? It could be an attempted “pig slaughter”, a crypto scam costing investors millions
