Opinion: Why Aren’t People Talking About Crypto Adoption Anymore?
Cryptocurrencies have become a significant subject since the turn of the decade. Since the introduction of bitcoin in 2009, cryptos have snowballed in value and popularity. This growth led to the development of over 1000 different virtual currencies with a global market cap of $1.12T. Similarly, crypto use is estimated at around 295 million users worldwide. This popularity made digital currencies one of the world’s raging topics, a subject that became the staple of conversations everywhere.
The Big Bad Crash
A shift in the global digital space has occurred, and talk of cryptos has dwindled too. In the last few months, the crypto market experienced its largest crash to date. The market nosedive wiped off a significant portion of the global market cap: The market crash led to losses of billions of dollars for investors in the sector. As a result, many people made significant losses on their investments. The negative feedback led to a mass exodus of people cashing out on the collapsing sector, which caused a rippling negative impact on several firms.
Crypto lenders such as Celsius and Three Arrows Capital were among the biggest losers of the crypto winter. In countries such as El Salvador, the uptake of cryptos (bitcoin) as a legal tender also resulted in losses for the government. Thus, this fear of losses has cut down the speed of the crypto adoption campaign. Given that investors could no longer be convinced of the potential of earning from crypto, talk of adoption followed suit.
Growing Uncertainty
As the crypto space navigates through its largest crash, the sector is also faced with growing uncertainty. In this case, many unknowns may negatively impact the industry. These uncertainties have lessened the momentum that cryptos had, slowing the call for adoption by pro-crypto groups and initiatives. These unknowns mainly revolve around two key areas; government policies and the global financial environment.
Government Policies
Before the start of the last decade, there existed little to no government intervention concerning cryptocurrencies. This lack of intervention was partially responsible for the surge in crypto uptake as many users flocked to the decentralized digital assets. However, this has not been the case in the last few years. As crypto flourished, the volume of funds transacted increased significantly. The volume of crypto mining also increased significantly, an issue that affected energy use.
These outcomes led to the government intervening under the pretext of preventing fraud, criminal activities, and environmental conservation. This intervention was expressed through bans and the formulation of policies targeting the areas of concern. In countries such as the US, policy regulation mainly targets exchanges and the taxation of crypto earnings. While most of these policies are in the early stage of development, they have significantly impacted the crypto economy.
Since exchanges and crypto-related companies may require government approval, many companies have ceased operation or moved out of some countries. On the other hand, the introduction of taxation policies has also reduced the number of investors. In other countries, such as China, crypto mining became outlawed as the government aimed to reduce its carbon footprint and energy use. These issues resulted in the growing uncertainty over the future of cryptos. In consequence, they also reduced the calls for crypto adoption.
The Global Financial Environment
The global financial environment is a zone made up of the economies of many different countries. In this zone, some events may transcend one nation’s borders and affect the other countries in a domino effect. In some cases, an incident in one country may influence the economy of other countries in the zone. Recent events in the international scene have led to a negative ripple effect that has affected the global financial environment.
Events such as the conflict between Russia and Ukraine have caused a wave of unfavorable outcomes to impact the crypto market. This conflict has escalated to the point of international involvement as more countries become involved and sanctions against Russia are made. As a result, the crypto space has also been impacted.
As the conflict goes unresolved five months later, uncertainty has only grown. This uncertainty has grown to envelop crypto activity in the international and affected regions. As a result, people and companies alike have toned down the campaigns for crypto adoption as attention is directed at pressing issues.
Author’s Take
As current events take shape, uncertainty in crypto continues to increase. The trajectory of the crypto market and the status of policies and international disruptions remain unchanged for the time being. However, it is only a matter of time before some if not all of these issues become resolved. This resolution will spark a flurry of positive results for users and companies worldwide while eliminating unpredictability. As things turn for the better, talk of crypto adoption will also increase. However, as things stand, only time will tell when the crypto market will flourish and retain its past heights.
