When people discuss what is holding back the mass adoption of cryptocurrencies, the focus often goes to its current limitations in usability. There are not many traditional retail environments that accept cryptocurrencies as payment, transaction times can be quite slow depending on the platform, and the user interfaces for most wallets and apps are not as user-friendly as they should be for mass consumption.
While these aspects are quite important to allow cryptocurrency holders to use and transact in crypto conveniently, the masses will have to actually desire to hold it in the first place. Even though usability is a legitimate concern, the real barriers holding back mainstream adoption of cryptocurrencies are fear (mainly due to volatility) and confusion (mainly due to crypto’s steep learning curve).
What are the barriers to Mass Adoption Of Cryptocurrencies?
The 2017 bull market in Bitcoin brought many interested new retail investors into the cryptocurrency markets, hoping to profit off of the parabolic price growth in Bitcoin at the end of the year. As is often the case with retail investors, they were a bit late to the party, and the vast majority suffered heavy losses as a result of the subsequent bear market in Bitcoin in 2018. You may have heard stories of people mortgaging their house and investing it all in Bitcoin at $20,000 each during the peak of the hysteria, only to suffer significant losses of 50% or more during 2018’s bear market.
It is these types of stories, and the very real volatility associated with it, that inspires fear among potentially new cryptocurrency investors and hinder them from not wanting to give cryptocurrencies a try. It is also this same fear that is likely responsible, at least in part, for the low volume that we see in the crypto markets today.
To be clear though, it is not just volatility itself that inspires so much fear, but negative volatility. To state the obvious, retail investors don’t like…