Although the value of bitcoin has fallen by over 60% from its record highs as of August 2022, this "crypto winter" isn't reducing interest in purchasing digital currency.
About 56% of consumers say they're at least somewhat interested in buying cryptocurrency within the next year, according to PYMNTS and BitPay's August "Paying with Cryptocurrency" survey.
Nearly 42% of millennials say they are either very or extremely likely to buy crypto in the next year. For Gen Z, that number drops to about 26%.
What's behind the continued fascination with crypto? While nearly 50% of respondents are motivated by the possibility of making money from their crypto investments, about 15% of respondents say the "fear of missing out" is driving their decision.
"History has shown us that the market has defied all odds even during downward periods, so investors remain positive about the ability of bitcoin and cryptocurrencies to remain resilient," says Iyandra Smith-Bryan, chief operating officer of Quantfury, a global broker-dealer that provides exchange spot prices on global and crypto exchanges.
Additionally, belief in the underlying blockchain technology continues to fuel investors' optimism about the adoption of cryptocurrency in the future, Smith-Bryan says.
Investors also tend to see the silver lining to crypto winters. "It eliminates the weaker players, leaving the best players on the field; giving those best players an opportunity to concentrate on advancements in technology, product development, and heightening support and service," Smith-Bryan adds.
While plenty of people hope to earn a profit from their crypto holdings, many want to be able to use it to make purchases too.
Around 40% of 18 to 35-year-olds plan to use crypto to pay for goods and services this year, according to Checkout.com's "Demystifying Crypto" report.
As the process of using crypto to make purchases becomes more seamless, "we will see hockey stick-like growth — much like the speed of growth of the internet," says Max Rothman, head of crypto and digital assets at Checkout.com.
Currently, the fluctuations in the value of many forms of cryptocurrency, such as bitcoin and ether, make it challenging to use as a payment method.
However, stablecoins, which is cryptocurrency that's value is pegged to the price of another asset such as gold, can present both consumers and retailers with the price stability they're seeking, 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 the volatility of markets," Rothman says.
Although interest in crypto remains high, there are real risks that should be taken into account.
Cryptocurrency is a highly volatile digital asset that is subject to erratic fluctuations in value. There are no guarantees of earning a profit, which is why experts recommend only investing as much money as you're willing to potentially lose.
Additionally, cyber thieves can sometimes hack the virtual wallets that store your crypto and steal your funds, so it's important to be extra diligent about security.
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