It’s been over a decade since the cryptocurrency industry has been around and the industry is constantly growing larger, welcoming more investors with time. If we look at the initial condition of the cryptocurrencies back in 2009, we would be surprised to see how much the industry has grown since then. The industry now comprises of over 12,000 cryptocurrencies and has a market capitalization that is over $2.2 trillion. For a sector to achieve such a tremendous market capitalization in almost 12 years is a huge feat demonstrated by any industry. However, despite all the growth and global recognition, the cryptocurrency industry is inherited the distrust and concerns of investors. This is the reason why most of the people are still hesitant in adopting cryptocurrencies. People still think that the mainstream institutions have not embraced cryptocurrencies. Unfortunately, the reality is completely different from how it has been perceived. People consider cryptocurrencies full of risks and uncertainties. If you also think the same, then allow me this opportunity to help you understand the crypto-sector a bit better.
Major Concerns Related to Cryptocurrencies
When it comes to the adoption or making investments in cryptocurrencies, there are several concerns that the investors have. At times, people do not even have concerns but they are planted like seeds in the brains of the investors. This is something that has been done by the competitors of the cryptocurrencies, which in this case are all the traditional financial institutions from around the world. However, the traditional financial sector is not the only root cause of this uncertainty but at times, the governments are also involved in this. I will go ahead and discuss all the elements that come into play in order to create uncertainty among investors:
Government and Regulatory Concerns
For the governments and regulatory authorities, the top priority is the protection of the state as well as its citizens. This is the reason why the governments/regulators are always stressing about cryptocurrencies being regulated and compliant. Unfortunately, the foundation of the cryptocurrencies does not go by the same ideology as the governments/regulators. While the governments/regulators continue collecting your personal and financial information, the cryptocurrency industry wants to get rid of this dilemma once and for all. For cryptocurrencies, it is you whose personal and financial information needs to be kept safe and secure. However, the governments/regulators want to control things the traditional way. Therefore, they are always asking cryptocurrency exchanges to keep collecting personal and transaction data of users under the KYC and AML regulations. This way, the governments/regulators continue their bashing on your heads and keep collecting information about you as they please. On the other hand, they have made you believe that any unregulated exchange is not safe for you, but these are the exchanges that are staying true to their foundations and fundamental goals.
Traditional Financial Institution Concerns
Then you have the traditional financial institutions that are observing the growth of cryptocurrencies and are least happy about it. They know that if the sector continues growing, they will keep losing their worth and business. This is the reason why traditional financial institutions continue mocking the services, strategies, and protocols offered in the cryptocurrency sector. Ultimately, they have the same strategy as the government of issuing notices to the citizens, intimating them about the usage of cryptocurrencies.
Cryptocurrencies are Volatile
Then the next concern you are bombarded with is that the cryptocurrencies are volatile, as they have no physical existence. It is the volatility that can result in a great loss as the cryptocurrencies continue falling from time to time, causing a great fall. This is another way of forcing you away from cryptocurrencies.
Now We Counter These Concerns/Arguments
The first and the second concerns are related to regulations and compliance. The reason why regulations/compliance are stressed by regulators/traditional financial institutions is for the safety of investors. Are the assets and savings of investors safe when investing in commodities, stocks, indices, or forex? No, this is what the whole purpose of investment is, as you never know what the outcome would be while investing. Just like other online trading brokerages, the crypto-exchanges are offering all the facilities, benefits, and services to you, in order to support you as much as possible. Whether you want trading signals, automated trading, crypto price analysis, historical data, or any useful information surrounding cryptocurrencies, the cryptocurrencies are ready to offer you with that content. Secondly, more than 95% of the crypto-sector is decentralized, because that was the whole purpose of cryptocurrencies. To give you the power of handling your finances, profits, and losses, without any intermediary or third party’s interference. This is what the governments, regulators, and traditional financial institutions do not like and thus, want to get rid of cryptocurrencies. As for volatility of cryptocurrencies, if they have the potential to bring you from riches to rags. They have the ability to do the same in a vice versa case. If people have lost money, then many people have turned into millionaires overnight investing in cryptocurrencies. Therefore, if you are looking at the losses of something, then you must also look at the profits of it as well. If the cryptocurrencies were mainly an industry full of losses, then why is it that the crypto-user base has crossed 200 million figure between 2020 and 2021? So if you are going to make a decision, make a decision based on these arguments so you have a balanced mindset and not a biased.