It has been said that you only get one chance to make a first impression. Perhaps the best example of this old saying is the cryptocurrency space.
From exit scams and money laundering to unmodified code and high-carbon footprints, the crypto landscape has spent the better part of the last decade traversing its infamous past. For many, sanitation of a decentralized ecosystem was inevitable – just when, what not. This mentality impeded a sense of urgency that should have been displayed and could eventually contribute to the skepticism exhibited by mainstream institutional investors.
Today, however, the decentralized economy has grown into something much larger. Even in the face of market volatility, the result of decentralized finance, the craze for irreplaceable tokens, and year-over-year increases in token prices have attracted the attention of the same investors who once left the decentralized economy.
So, how do we convert this institutional interest into institutional investment? While the answer may be simple, execution will probably prove to be far more challenging. Let’s take a look at what needs to be done in the coming months and years to maintain mainstream institutional interest and safe institutional investment.
Given last week’s decline, it is natural to recognize market stability as the most obvious problem within crypto. But, make no mistake, the primary (and most difficult) challenge facing the crypto space is security.
Major crypto thefts, hacks and frauds, according to CipherTrace’s Cryptocurrency Crime and Anti-Money Laundering Report Total $ 1.9 billion in 2020 – Second highest annual value recorded. However, the good news is that this figure reflects a drastic reduction in fraud incidents recorded in 2019 by $ 4.5 billion.
Significant, sustained measures have been taken by platforms across the space to make the crypto ecosystem a safer environment for merchants. With crypto piracy bottom Around 60% in 2020, there are early indications that increased security measures are working and that space is becoming more secure.
In every way, it is an impressive achievement in itself. However, more than a reduction in fraud would be required to show interest in investing. It will make collective efforts throughout the space to implement measures to prevent nefarious activity. Platforms within the space are tasked with demonstrating to institutions that the crypto space is no longer for useless purposes, but instead, a tried and tested digital economy that cannot be ignored.
The primary way to attract mainstream institutional investment is through wholesale cleaning of the space – a commitment to deliver to users of any skill level, platforms that are thoroughly investigated and that provide protection at a premium. Safe and secure trading platforms are necessary to allow cross-ecosystem trading without fear of a faulty platform or substandard listing.
Mainstream institutional investors are motivated by good strategy in a safe environment, not by promotional cycles that generate misinformation. In truth, the crypto space is in the process of maturing. However, for it to mature to a point that translates into institutional dollars, it would require more sustained growth.
Cryptocurrency has long been suffering from usability problems. In relation to financial investment, security and utility go hand in hand. Naturally, users feel more secure when the platform is easier to navigate and the functionality is equal. However, due to the speed of the market and scale, user experience, or UX, has not been the first priority for crypto exchanges, and erasing that perception from the eyes of mainstream audiences has been a tough fight.
The early days of crypto were much more forgiving. Subpar UX was easy to ignore as most crypto users were merchants and speculators with technical know-how to navigate complexity. However, when less tech enthusiasts entered the space, exchanges and trading platforms shifted their focus to the development of consumer-facing UX. Although UX has undoubtedly improved since the early days, there is a way to make transactions easier for more savvy newcomers than used in existing trading apps to make UX seamless.
Currently, the average cryptocurrency trader Use 3.36 Cryptocurrency Exchange to buy, sell and hold various currencies. This means that the average trader is expected to toggle between more than three different interfaces, complete three different background checks, and track spot prices across three exchanges. This is a difficult process for even the most experienced traders. Making the assumption that the space is ready to welcome new mainstream users into the fray is completely misguided.
Since the end of 2020, retail and institutional interest in the sector has increased. However, the platforms in place are constrained by insufficient UX and are far from user-friendly. To accommodate the influx of institutional users who are not crypto-savvy, it is important that platforms place functionality and usability at a premium not only to attract these users but also to retain them.
Perhaps ahead of time, the cryptocurrency space is causing significant waves among traditional investors. Like with the major investors Mark cubano and Michael Saylor Normalizing Cryptocurrency Investments, Together with Crypto Exchanges Coinbase is being listed on Nasdaq, There is reason to believe that cryptocurrency will make its way into more investment portfolios. In addition, converting speculators into investors depends on the crypto space’s ability to mature in a meaningful way.
When viewed from the outside, the crypto space still adds images of basement-housing twenty-something tinkering on GitHub and Reddit. While most of us know that this is far from the case, it is up to those within the space to demonstrate the long-term viability of what is being developed from within.
2020 increased interest in cryptocurrency in an unprecedented way. As more centralized common men enter the decentralized ecosystem, space has no choice but to mature – and quickly. Rest assured, the place will mature to accommodate this new interest.
We are in completely unknown territory. Cryptocurrency originated in mainstream headlines faster than many forecasts. However, for institutional investors to seriously invest the cryptocurrency space, the ecosystem must become cleaner, more usable and more mature. The current iteration of space suffers from its checkered history, and it relies on it to reshape its image within the cryptosphere.
This article does not contain investment advice or recommendations. Every investment and business move involves risk, and readers should do their own research when making decisions.
The views, opinions and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointegraf.
James Gillingham Finxflo is the CEO and co-founder. James is engaged in developing and implementing strategic plans and company policies, maintaining an open dialogue with stakeholders, and driving organizational success. He is a specialist in the management and execution of high-level strategic objectives with over 13 years of experience in the creation, development and expansion of multinational organizations.