There are those who think crypto is a fad and those who think crypto is the future, but as usually the case with such polarising opinions, the truth is most likely to be somewhere in the middle.
So what do the next few years hold? The media has developed a fascination with crypto. Over the past months, the news has been saturated with stories of Bitcoin hitting an all-time high, Ethereum driving DeFi, the emergence of NFTs, and the rise of memecoins.
In all the hype, it’s easy to forget that crypto is a fairly recent invention. Bitcoin, the first decentralised digital currency, only appeared in January 2009 – just over a decade ago!
The industry is maturing quickly. Market players are innovating endlessly to disrupt existing financial infrastructure and offer consumers greater autonomy. From cryptobanks to crypto loans, blockchain technology is reimagining traditional payment rails.
Not everyone is happy about it, but anyone calling for a ban of crypto outright is missing the point.
The argument against cryptocurrencies can be broken down into three main categories. Critics argue that crypto powers criminal activity, that mining is environmentally damaging, and that it’s speculative and unregulated, thereby risky for users.
Though these arguments are pervasive in the public consciousness, they’re easy to disprove. A recent Chainalysis report found that “in 2020, the criminal share of all cryptocurrency activity fell to just 0.34%” from 2.1% in 2019. As technology around tracking illicit transactions improves, this will continue to decrease.
Regarding cryptocurrency’s carbon footprint, it really depends on which cryptocurrency we’re talking about. Nano, for instance, doesn’t rely on mining, and therefore offers a sustainable, eco-friendly alternative. Ethereum, meanwhile, has proposed a solution to minimise its carbon footprint by a thousandfold.
If we’re talking about bitcoin, it’s true that mining consumes a lot of energy, due in no small part to the majority Chinese miners burning fossil fuels for electricity. However, this is rapidly changing, with last year’s Global Cryptoasset Benchmarking Study finding that 76% of the world’s miners are now using renewable energy sources.
As for the last point, there is a clear division between speculative assets and those developed to facilitate real-life use cases, such as cheaper, faster remittances or accessible financing. Each comes with its own set of regulatory challenges, but I’d like to believe most governments, central banks, and regulatory bodies acknowledge that stifling innovation to avoid disrupting the status quo is not the way forward.
Unmasking and regulating market players
The cryptocurrency market cap surpassed $2 trillion for the first time this year, with stablecoins comprising a $100 billion share. The industry is too big to ignore, and too valuable to remain unregulated. And while there are certainly those who’d prefer to live the “libertarian fantasy” of early crypto adopters, the involvement of big tech and central banks have forced regulators to propose frameworks to ensure a comprehensive, coherent, and consistent approach.
Regulatory certainty is a draw for crypto companies and crypto enthusiasts alike. The crypto-friendly stance of the Monetary Authority of Singapore has not only attracted the biggest market players, but also resulted in 43% of Singaporeans owning digital assets. As the market landscape changes and regulation keeps pace with innovation, we will begin to see other countries offering more consumer protections and, subsequently, more widespread crypto adoption.
A bigger role for women
Women tend to be more risk averse when it comes to investing, but that may be to their benefit, as studies have found that female investors outperform their male counterparts. A lack of confidence in cryptocurrencies, possibly due to an overreliance on expertise, meant women were slower to begin trading. In the last year, however, we’ve seen a dramatic shift.
Not only has female investment in Bitcoin soared from 13% in 2019 to 43% in 2020, but the rise of altcoins has brought female leaders such as Kathleen Breitman, George Coxon, and Denelle Dixon to the mainstream. As the size of opportunity becomes clearer, women will continue driving progress in the crypto industry. In parallel, this visibility will encourage more female customers and boost the popularity of crypto further.
So if we’re talking about where we’ll be in the next few years, it’s evident that the crypto market and its key players are rapidly evolving. As the industry continues to mature, solutions to its biggest challenges – stopping illicit activity, minimising environmental impact, ensuring accountability – will be found, developed, and implemented.
The convergence between traditional and digital economies is accelerating. In building this parallel ecosystem, the market participants willing to “submit themselves to more rigorous scrutiny should also have an easier time operating within the bounds of traditional finance.” Even the newer technologies, such as decentralised finance (DeFi), are beginning to move in that direction, validating an opinion shared by James Burke of Outlier Ventures, that “…if you want mainstream users, the reality is that the average person wants the insurance policy of a regulated product.”
Optimistically, this suggests a wider spectrum of consumers will soon have access to even more alternatives to the entrenched financial systems – without the inherent risks associated with new technologies. Even better, the technologies themselves will become interoperable, improving user experience and increasing consumer trust. And, most importantly, the vision of a more equitable society with wider representation and a fairer distribution of wealth will be one step closer to becoming a reality.
About the ‘Women in Crypto’ Campaign
This article is written by Marija Riba, Senior Product Manager at Wirex. The article comes following her participation in the recent event ‘Women in Crypto: Tech, Innovation & Digitisation’, as part of Wirex’s ‘Women in Crypto’ campaign. The campaign was created in 2020 with the core aim of celebrating women in the crypto sector and encouraging others to get involved, reflecting Wirex’s vision of making cryptocurrency ‘open to all’. Over the next few months, Wirex will be releasing a series of new and exciting content on their blog, written by women and celebrating women.
The event also marked the launch of Wirex’s Rising Women in Crypto Power List 2021, that is now open for nominations. The Power List endeavours to showcase incredible women in the sector, recognise their achievements, and inspire other women to get involved themselves. Wirex and UKTN are calling out for individuals to nominate themselves or someone they know, with judging criteria based on their achievements, potential, influence, ambition, leadership skills and innovation. Whether they’re a crypto veteran or a new rising star, it aims to recognise women from all around the crypto industry.
Wirex is a worldwide digital payment platform and regulated institution that has forged new rules in the digital payments space. In 2015, the firm developed the world’s first crypto-enabled payment card that gives users the ability to seamlessly spend crypto and traditional currencies in real life.
Wirex was created in 2014 by CEOs and co-founders Pavel Matveev and Dmitry Lazarichev, who identified the need to open up the esoteric world of cryptocurrencies and make digital money accessible for everyone. With the core aim of making it as easy as possible to use digital assets in everyday life, Wirex provides a trusted and cost-effective service for crypto and traditional currency transactions by incorporating the next generation of payments infrastructure integrated with cryptocurrency blockchains
With nearly 4 million customers across 130 countries, the company offers secure accounts that allow customers to easily store, buy and exchange multiple currencies instantly at the best live rates on one centralised mobile app. Quick and simple crypto transfer options are available, as well as the freedom to spend 150+ traditional and cryptocurrencies in more than 61 million locations around the world using the Wirex card.
Wirex continues to develop the product in line with market developments, whilst adhering to regional regulations and securing appropriate licensing where it exists. A proven industry pioneer, Wirex launched their own native utility token, WXT, and introduced the world’s first crypto reward programme, Cryptoback™, which earns cardholders up to 2% back in WXT for every transaction they make.
Wirex is based in London, with offices in Singapore, Kyiv, Tokyo, Toronto, Dallas, Dublin and Atlanta. With over $5bn worth of transactions processed already and rapid expansion into new territories, including the US, Wirex is uniquely placed to support and promote the mass adoption of a cashless society through creative solutions.
About the Author, Marija Riba
Marija Riba is a Senior Marketing Project Manager at Wirex. With over 7 years’ experience in FinTech, she is deeply committed to the payment company’s vision of making all currencies equal and open to all. Her expertise is in coordinating product releases – such as the recent Wirex Mastercard launch, collaborating with partners to educate consumers about the benefits of digital currencies, as well as conducting research into mass cryptocurrency adoption and the democratisation of financial access.