Although the value of bitcoin has fallen more than 60% from its August 2022 highs, this “crypto winter” is not reducing interest in buying digital currency.
About 56% of consumers say they are at least somewhat interested in buying cryptocurrency over the next year, according to the August “Paying with Cryptocurrency” survey from PYMNTS and BitPay.
Nearly 42% of millennials say they are very or extremely likely to buy crypto in the next year. For Gen Z, that number drops to around 26%.
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What’s behind the continued fascination with crypto? While almost 50% of respondents are motivated by the possibility of making money from their crypto investments, around 15% of respondents say that “fear of missing out” drives their decision.
“History has shown us that the market has defied all odds even during downturns, so investors remain positive about the ability of bitcoin and cryptocurrencies to remain resilient,” says Iyandra Smith-Bryan , chief operating officer of Quantfury, a global broker. which provides spot trading prices on global and crypto exchanges.
Additionally, belief in the underlying blockchain technology continues to fuel investor optimism about cryptocurrency adoption in the future, Smith-Bryan said.
Investors also tend to see the silver lining of crypto winters. “It weeds out the weaker players, leaving the best players on the pitch; giving these top players the opportunity to focus on technology advancements, product development, and improving support and service,” adds Smith-Bryan.
While many people hope to make a profit from their crypto holdings, many also want to be able to use it to make purchases.
About 40% of 18-35 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 transparent, “we will see growth similar to that of a hockey stick – much like the speed of growth of the internet,” says Max Rothman, head of crypto and digital assets at Checkout.com.
Currently, fluctuations in the value of many forms of cryptocurrency, such as bitcoin and ether, make it difficult to use as a method of payment.
However, stablecoins, which are cryptocurrencies whose value is pegged to the price of another asset such as gold, can provide consumers and retailers with the price stability they seek, Rothman said. .
Stablecoins “provide all the benefits of a digital asset — transparency, decentralized data, and immediate availability of funds — but are better able to withstand market volatility,” Rothman said.
Although interest in crypto remains high, there are real risks to consider.
Cryptocurrency is a highly volatile digital asset that is subject to erratic fluctuations in value. There is no guarantee of making a profit, so experts recommend investing only as much money as you are willing to potentially lose.
Additionally, cyber thieves can sometimes hack into virtual wallets that store your crypto and steal your funds, so it’s important to be very diligent about security.
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Crypto Winter Doesn’t Scare Investors Away – Here’s Why
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