By Michał Domarecki, CEO and co-founder of Synapse Network
Despite Bitcoin’s recent market woes, its market capitalization still exceeds $390 billion, showing growing interest in the asset class. But the industry has a lot to learn from the surge in retail investment that happened at the start of the COVID-19 pandemic. As crypto receives bad press regarding the recent Luna crash, it becomes essential for the industry to be more accessible than ever to achieve its lofty goals of decentralization to bring more HODLers into the fold.
But barriers to entry into crypto are holding back many of these would-be crypto enthusiasts. It is difficult to enter the crypto space without a thorough understanding of the crypto ecosystem and the knowledge required to start trading in the space. But how can crypto become more accessible? The answer to this question is essential for the industry to endure what could become a crypto winter.
Make investments accessible to standards
The post-pandemic boom paved the way for a new wave of investors via online brokers. One of the main motivations for new investors during this period was the ability to make smaller investments, as reported in the FINRA Consumer Insights: Money & Investing 2021 report. For example, Robinhood, a platform for novice traders to dipping their toes into the stock pool, has exploded during the pandemic, with a current user base of around 31 million verified users as of May 2022.
In addition to trading small amounts of money, Robinhood’s easy-to-use platform has made investing less daunting for young investors and has proven to be a great entry point for those looking to use their small change to open a crypto wallet. Although Robinhood’s platform offers low-fee crypto trading, it only supports taxable brokerage accounts and does not offer any fixed income investment products.
But other crypto trading platforms that offer more crypto options, such as Coinbase, have their own set of issues to deal with, mostly navigating a seemingly complex UX. Artkai, a global digital product design and development team, conducted a study with over 30 blockchain-related projects and found that the UX design of most crypto platforms was inaccessible for those who are not crypto and tech savvy.
In order to be accessible to newcomers, the crypto space needs to think strategically. The combination of Robinhood’s UX and Coinbase’s plethora of crypto trading options could help break down crypto entry barriers and bring new players into the space.
But solving the UX problem only scratches the surface of some of the problems faced by crypto newbies. Twenty-nine percent of people who have never bought cryptocurrency say their doubts about what to do with it keep them from buying, according to research by CES Tech. We might have expected that three years ago. But given the undeniable push for digital asset mainstreaming in the latest bull run, the fact that more than a quarter of investors don’t even know what to do with the new assets should worry developers at all levels.
Educating the public on how and what they can do with their crypto assets becomes crucial in shifting the needle to mainstream crypto usage. Digital payments have entered a new era, an era where many live with crypto and digital assets, but there are still those who have no idea. Just as credit cards were not immediately accepted, a new form of digital asset needs time to normalize. A recent bill signed last year in Georgia is a great example of how high school currency education is advancing public education about crypto.
But a more pressing problem stems from the abundance of crypto scams. Scams and security issues are preventing standards from entering the crypto market, and for good reason. Therefore, before investors can even start small, they need to know what they are getting into and have some basic training on what crypto is and what to look for.
Creating apps or educational materials helps users understand how to spot a scam and educates the public on what to know when investing. Along with this, the creation of accessible user-friendly wallets will push standards to join the crypto sphere. Hopefully, the market can then rebound and even thrive in the next bull cycle.
About the Author:
Michał Domarecki is a multi-entrepreneur and investor with more than 15 years of experience in business management. After founding and leading successful international companies in IT, transportation and logistics, Michał became co-founder and CEO of Synapse Network. Passionate about cryptocurrencies and blockchain, Michał also founded a crypto community and acts as an advisor and investor in promising blockchain start-ups.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.