Exploring the paradoxical rise and uncertain future of crypto
This all leads to one big trend. Cryptocurrency, once only understood among a relatively fringe community of anti-establishment investors, is now becoming a household name – and quickly. Analysts estimate that the global cryptocurrency market will more than triple by 2030, hitting a valuation of nearly $5 billion. Whether they want to buy into it or not, investors, businesses, and brands can’t ignore the rising tide of crypto for long.
But crypto can’t seem to escape paradoxes anywhere. Investors believe in regulation, yet are worried about many of the impacts that regulation will bring about. They’re eco-conscious, but crypto has a huge carbon footprint.
Digging into these nuances is key to understanding overall consumer sentiment – and predicting consumer behavior – around a very uncertain future of cryptocurrency.
Alongside corporations entering into the market, crypto trading and mining has caught the eye of government overseers like never before.
Since the invention of bitcoin, governments have done relatively little compared to traditional investment categories to regulate or moderate the market. For the most part, cryptocurrency has been allowed to spread around the world as a uniquely decentralized financial asset.
The details of what government oversight will look like, however, matter a great deal to investors.
On the one hand, many investors believe greater regulation could legitimize the fledgling marketplace – enabling more businesses to accept digital currencies, increasing their value and security from fraud, all while reducing volatility and criminal activity.
The paradox here lies in the difficult balance between wanting regulation, and fearing the loss of the fundamental character of crypto that would result from that very regulation.
Regulation offers protection and stability; while crypto has thrived from volatility and anonymity. But currencies can’t operate without being regulated, especially not to the scale that crypto has reached.
Finding a middle ground between regulating a lawless commodity and allowing it to continue to build value will be a challenge for governments, coin exchanges, and investors alike.
While this does not reflect well on consumer views of their government, it does bode well for brands. Building trust and credibility in the crypto space is, in the eyes of consumers, easier if you’re not a government entity. Perhaps this reflects the anti-establishment ethos of crypto’s early culture.
Either way, it certainly presents opportunities for brands in technology and related fields to become a trusted partner, educator, and safety net – swooping in to fill the gap where governmental trust is lacking.