It’s the one-billion (maybe even trillion…) question in the crypto space since the very early days of Bitcoin pre-history. Will this revolutionary new tech ever reach the point of mass adoption, or is it all a larger-than-life macroeconomic speculative game that will be reabsorbed by traditional markets down the line?
As the years go by since the inception of Satoshi’s dream in 2010, the former looks increasingly more likely than the latter, despite all the negativity and naysaying that has traditionally accompanied this climb to relevance.
But, as we get closer and closer to the sight of that much-anointed chequered flag, a question is coming to the forefront: what does the finish line really look like? What is the one marker that will spell total and complete adoption, and across what ‘mass’?
Let’s take a look.
Not A Question of Awareness
The first hurdle of the climb has arguably been cleared with conviction by now.
While for most of the first decade of its existence, cryptocurrency was seen as the remit of tech bros, money launderers, and drug market participants, we can say with confidence the concept has been fully absorbed by popular culture and only those hiding under very big rocks would still be confused by someone using the word ‘crypto’. In fact, 57% of Americans are aware of it, making it the most popular investment vehicle after stocks.
There is of course an ocean between just being vaguely aware of something and fully comprehending its potential and implications, with 60% of the respondents of the same research admitting they probably don’t know crypto as much as they should.
This, however, does not seem to be stopping the development of the market: a staggering 81% of respondents stated they were planning on either maintaining current investment levels or increasing them going into Q4 of 2022 and into 2023.
This statistic pairs up quite well with the idea that a true, complete ‘mass adoption’ of a technology, especially a financial one, is achieved when comprehending the tool isn’t essential or common for its users. For example, only a very small portion of Visa and MasterCard clients are fully aware of the complexities of the card providers’ business model, the tech behind it or the outlook of their growth – yet they use their product multiple times a day for a lifetime.
In essence, their products are normalised by adoption and just seen as yet another cog in the big, evolving machine of our modern society. Something to be trusted without too much further scrutiny.
The first steps towards getting current and future crypto users to feel quite so at ease with their investments are definitely underway: 19% of American citizens and 17% of Europeans have adopted the use of at least one token, with the global average at an encouraging 23%.
These numbers would probably sound unbelievable to any traders in the space prior to the 2017 and 2020 bull runs, and they’re the undeniable proof of slow but sure progress.
Institutional Adoption… Of What?
Something even less expected to most, especially Bitcoin maximalists, was the change of course that the entire industry performed throughout the last few years – of which Ethereum’s rising popularity has been the main feature.
While the early days of crypto pipe dreams and promises focused on digital ledgers and tokens revolutionising daily currency and replacing the enemy ‘fiat’ currency backed by the dollar and regulated by banks and governmental organisations, this isn’t the case anymore.
Due to the clunkiness, expansiveness, and general ageing condition of the underlying tech for currency-focused projects such as Bitcoin, the stage was set for a shift of priorities.
Smart contracts and creative financial products such as PoS networks offering liquid staking and yield farming became the new gold and paved the way for a new round of institutional interest and subsequent adoption.
With such a shift, crypto went from trying to compete with existing and cumbersome old macroeconomic conventions to devising solutions for their improvement and evolution, which can coexist with the ‘status quo’ of financial management rather than fight it.
This approach has definitely worked, and despite the negative market sentiment of 2022 most (85%) investors agreed that digital currencies are here to stay as one of the most popular financial products. This backing by recognised and often public trade bodies has only strengthened the general public’s interest in the matter and their faith in this sector’s future.
This major shift in adoption strategy, though not conscious or very organised, is proving a good step forward. Still, just like any direction change it involved reworking some of the steps previously undertaken, re-educating many individuals and media outlets, and a lot of intense fighting. But it’s definitely a turn for the best.
The Final Step: A Seamless User Experience
The stats above paint an almost entirely convincing picture: people are aware of crypto, are able to confidently own it and trade it, they want more of it and to do more with it, they want their banks to carry it and they want to see it improve existing financial processes, and they don’t think this will change. But there’s one thing missing: they’re not quite using it yet.
As just mentioned, this has been made difficult by the change of direction taken by the industry. People use currency every day, even for buying coffee, but they rarely engage with financial investment products, and tend to do so in very controlled environments.
This can’t really happen until general public access to these products is fully regulated and entrenched in various national legislations, something that is only just starting to happen – probably fostered by the recent critical issues brought to the fore by the collapse of CeFi over the course of the past year.
Despite the nature of these early days of codifying crypto norms, we are bound for rapid growth and evolution over the course of the next 5-10 years.
It’s conceivable that the misfortunes experienced by the sector over the past 12 months might one day be seen as a cathartic moment in which, by attracting regulatory attention, crypto finally became too big to be ignored and too big to be still treated as something on the fringes of traditional finance.
This will be, in essence, the day when we can stop discussing when mass adoption will come – and start arguing as to what to do to preserve all the things that made crypto successful in its climb to the fore.