2022 was a difficult year for crypto, will 2023 be better?

Since bitcoin’s (BTC) inception in 2009, around 20,000 altcoins have been produced, with a total market cap of over $1tn. Despite the current turbulence in the crypto market and rising interest rates that prompt investors from investing in risky or speculative assets, there is still optimism and belief in the future of cryptocurrency. Some users consider crypto as a possible alternative to digital-first payments network.

The key to making the crypto ecosystem become resilient is by ensuring the transactions or exchanges work seamlessly, ethically and safely, and users have the best experience according to their personal financial needs. From a crypto exchange perspective, offering instant payment options is crucial as users will want to react fast to market changes with bigger investments in, and/or instant pay-outs. Users need reliable payment solutions that are able to support these instant operations and decision making. One of the main challenges faced by users is finding payment and banking partners that are crypto-friendly and who understand their business, allowing them to offer a secure fiat to crypto solution.

As traditional banking and payment methods are beginning to work alongside and for the crypto world, we are seeing huge opportunities for all parties involved in the crypto exchange. Currently, digital payment providers and cryptocurrency payment processors are adding tremendous value for crypto to reach the ultimate audience and adoption levels. Payment processors sit between the traditional banking and cryptocurrency networks. This means opening crypto as a viable method of payment for an ever-increasing number of merchants.

Need for education

Although cryptocurrencies are slowly making their way into everyday life, there is still a lack of knowledge of the crypto world and consequently, a need to promote it, which in turn will build trust.

The knowledge on cryptocurrencies has a positive direct impact on trust levels. The more an institution/user knows about crypto, the more they trust it. Providing a reliable fiat to crypto payment solution that offers well-known payment methods is, at some extent, a form of boosting confidence. There has been a trend in payment companies’ growth and evolution that provide on-ramp solutions, as well as offering payment methods like vouchers or local payment options.

An increasing interest in the sector will allow more people to gain a better understanding of how it works and what it has to offer, which could further drive its adoption. For crypto exchanges, partnering with global payments providers that can open new markets for them is a great opportunity.

Digital wallets are unique in the sense that they bring a user base and help crypto merchants with customer acquisition and support the overall adoption of crypto.

As crypto will be taking more and more space in the “real world”, new uses of the technology will pop-up and all the relevant actors need to be prepared for this, for example crypto exchanges, payments providers, retailers and users.

There is a strong need to design a new framework to understand crypto as digital assets become firmly embedded in mainstream finance. This needs to be a priority if we are to continue building trust and advancing adoption of digital assets. The increasing regulation in the crypto space is an expected evolution that we have seen in other industries, and we will only continue to see this happening. There is no doubt that crypto is surely here to stay for the long run, and cryptocurrency trading will continue to operate in a more regulated fashion.

The crypto ecosystem has a number of challenges to solve, but if they can focus on minimising the gap and eliminating the barrier of knowledge as well as building trust, massive adoption will grow.

Mikael Lijtenstein is CEO at AstroPay, a leading digital wallet. He is a fintech and payments expert with over eight years’ experience in alternative payments, and digital wallets. He began his career in the industry in 2015 joining AstroPay, shortly becoming chief operating officer, being responsible for all of the company’s sales and operations, including management of AstroPay’s product development, innovation, sales activities and service in multiple markets.