Blockchain Opportunities: Cryptocurrency

Cryptocurrencies were the first use case of blockchain. They also remain the biggest, at least in terms of market capitalization. The e-currencies have seen a lot of mass adoption in recent years. Nowadays, numerous merchants accept cryptocurrency payments. This is made even easier with the growing number of payment processors also adding crypto to their supported payment options.

In this article, we’ll go over the changes crypto has recently seen. We’ll also take a look at its pros and cons, so you can decide whether it works for you.

Cryptocurrency Growth

The cryptocurrency market has seen a significant upswing in the past year or so. Around this time a year ago (May 2020) the total crypto market cap hovered around USD 250 billion. At the time of writing, this amount had grown to USD 2.12 trillion—an increase of more than 750%. Bitcoin itself has jumped from around USD 9k to more than USD 54k, even reaching an all time high of almost USD 65k in April 2021.

A good amount of growth is owed to institutional interest. In October 2020, PayPal announced they would add cryptocurrencies to their online wallets. This feature launched at the end of March for users in the US. Checking out with crypto means that users can swap their Bitcoin, Ethereum, Litecoin, or Bitcoin Cash for USD instantly, with no extra fees, and pay with that.

In February 2021, Tesla CEO Elon Musk announced the company had invested USD 1.5 billion in Bitcoin a month earlier. He has also expressed interest in Dogecoin via Twitter, sending the coin’s price soaring.  

In the same month, MasterCard joined the club of payment providers interested in crypto. Only weeks later, Square invested another USD 170 million in Bitcoin.

March saw Goldman Sachs relaunching their crypto trading desk following increased client interest. Sources report that Morgan Stanley is launching access to Bitcoin for their wealthy clients. Bitcoin is not the only crypto that has garnered interest. Ethereum is also soaring thanks to big players entering its market.

With institutional investors recognizing cryptocurrency advantages, coins are quickly becoming more widely accepted. But what about the price?

Should I Be Worried About Price Swings?

Cryptocurrency price chart

This is one of the most common questions about cryptocurrencies. It is true that huge swings are not unheard of. However, price swings in 2021 cannot be compared to earlier changes due to increased institutional interest. This introduces two main aspects to the cryptocurrency market:

  • It acts as a price stabilizer. With large players consistently using cryptocurrencies, the price is less likely to undergo drastic changes. It will still fluctuate, but this interest is proof that the market is maturing.
  • It proves cryptocurrencies are there to stay. Institutional interest gives the cryptocurrency space the type of solid backing that can’t be otherwise found. 

Price swings are a part of any asset—the difference is that they’re more visible in cryptocurrencies. Extreme increases are often followed by brutal corrections. However, we can safely say it will not spell death for the assets. 

Ease of Use

Many were wary of trying cryptocurrencies because they seemed too hard to use. This is why MasterCard and PayPal offering cryptocurrencies will help bridge that gap. Those who are still insecure can now get access to coins through companies they trust. Once they feel familiar with the concept, they can move on to a more independent approach. This can also act as an incentive for international customers, who can skip exorbitant conversion fees that banks charge for fiat.

The same is true from the business side of things. More user friendly crypto solutions mean an easier implementation of such payment options. More international customers can mean spreading their reach beyond their current market. With a growing number of crypto payment processors, you do not have to deal with setting up wallets, remembering many keys, etc.—unless you want to.

Summing Up

Merchants who do not offer cryptocurrency payments may fall behind compared to their competitors who do. With the growing interest, crypto is becoming more and more accessible to everyone. This means there is no reason not to integrate it if you find it can help your business. You can expand your reach into other countries and open up more possibilities.

If you want to know more about blockchain, you can stay on top of these and other trends by checking out This Week in Blockchain. You can listen to the podcast either at weekinblockchain.com or through your preferred podcast platform. If you would rather watch, visit watch.weekinblockchain.com. Finally, to connect with like-minded people and comment on each podcast, discussions are available every Monday at 12pm EST / 5pm GMT on Clubhouse. See you there!