Crypto winter isn’t scaring away investors—here’s why

Although bitcoin’s value has fallen by more than 60% from its all-time highs of August 2022, this “cryptocurrency winter” is not reducing interest in buying digital currency.

About 56% of consumers say they are at least somehow interested in buying cryptocurrency within the next year, according to PYMNTS and BitPay’s August “Crypto Payment” survey.

Nearly 42% of millennials say they are very or extremely inclined to buy cryptocurrencies in the next year. For Generation Z, that number drops to around 26%.

What’s behind the continued fascination with cryptocurrencies? While nearly 50% of respondents are motivated by the possibility of making money from their cryptocurrency investments, around 15% of respondents say “fear of losing” is driving their decision.

“History has shown us that the market has defied all odds even during downturns, so investors remain positive about bitcoin and cryptocurrency’s ability to remain resilient,” says Iyandra Smith-Bryan, chief operating officer of Quantfury, a broker – global dealer providing spot trade prices on global and crypto exchanges.

Furthermore, confidence in the underlying blockchain technology continues to fuel investor optimism about cryptocurrency adoption in the future, says Smith-Bryan.

Investors also tend to see the bright side of crypto winters. “Eliminate the weakest players, leaving the best players on the pitch; giving the best players the opportunity to focus on advances in technology, product development and increasing support and service,” adds Smith-Bryan.

While many people hope to earn a profit from their cryptocurrency holdings, many want to be able to use it to make purchases as well.

According to Checkout.com’s “Demystifying Crypto” report, around 40% of 18-35 year olds plan to use cryptography to pay for goods and services this year.

As the process of using crypto to make purchases becomes more fluid, “we will see growth similar to a hockey stick, just like the speed of Internet growth,” says Max Rothman, head of cryptographic and digital assets at Checkout. com.

Currently, fluctuations in the value of many forms of cryptocurrency, such as bitcoin and ether, make it difficult to use as a payment method.

However, stablecoins, which are cryptocurrencies whose value is pegged to the price of another asset such as gold, can present both consumers and retailers with the price stability they are looking for, Rothman says.

Stablecoins “offer all the benefits of a digital asset – transparency, decentralized data and immediate availability of funds – but are better able to withstand market volatility,” says Rothman.

While interest in cryptocurrencies remains high, there are real risks that should be considered.

Cryptocurrency is a highly volatile digital asset subject to erratic fluctuations in value. There are no guarantees of earning a profit, which is why experts recommend investing only as much money as you are willing to potentially lose.

Additionally, cyber thieves can sometimes hack into virtual wallets that store your cryptocurrencies and steal your funds, so it’s important to be more diligent about security.

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