In recent years, cryptocurrency has garnered significant public attention and has transitioned from a niche idea, adopted by a small community of investors, into a mainstream infrastructure maintained and backed by principles and technology. Despite the volatility of crypto markets throughout the past year, consumer confidence in crypto remains high due to the increasing integration of digital assets into our everyday lives. Adoption of crypto is influenced by two primary factors: the support of financial institutions and level of consumer interest. Financial institutions and companies are adopting crypto into their investments, product offerings, and policies, while consumers are demanding the increased benefits of crypto in contrast to our outdated financial institutions and systems.

Financial Institutions

One of the most significant ways crypto integrates into our lives is through financial institutions. Traditional banks and financial institutions are adopting crypto as an investment asset, recognizing its superior underlying tech, as well as its potential for growth and diversification. This adoption is driven by institutional investors who are looking for alternative investment opportunities and consumers who want to invest in crypto. For instance, In March 2021, Goldman Sachs restarted its cryptocurrency trading desk after shutting it down in 2018. The bank also plans to offer Bitcoin futures and non-deliverable forwards to its clients.

Due to increased consumer and institutional demand, financial institutions are also exploring ways to integrate crypto into their product offerings. Credit card giant, Mastercard, now offers a prepaid Mastercard that can be loaded with Bitcoin and used for everyday purchases anywhere Mastercard is accepted. Mastercard also partnered with SoFi, a personal finance, that allows merchants using their credit card to receive crypto cash back. Similarly, Visa collaborated with Crypto.com to offer a Visa debit card that can be funded with Bitcoin and used to make purchases at over 70 million merchants worldwide. These moves by mainstream financial institutions demonstrate that cryptocurrencies are gaining wider acceptance and recognition as legitimate financial assets.

The expansion of crypto into everyday financial transactions is persistent but remains largely peer-to-peer. This reality presents a huge opportunity for financial services companies and increases consumer awareness and trust. Cryptocurrencies provide a fast, secure, and cost-effective way to transfer value between parties. As a result, cryptocurrencies have the potential to revolutionize the way financial services are delivered and create new business models for financial services companies. For instance, companies such as PayPal and Square have already begun to offer their customers the ability to buy, hold and sell cryptocurrencies. This expansion demonstrates the demand for crypto-based financial services.

Consumer Appetite

Another aspect contributing to consumer confidence in crypto is the transparency and security features of blockchain technology that underpin digital assets. Consumers who are concerned about their financial privacy and security trust blockchain technology as it is decentralized and uses cryptography to secure transactions, making it nearly impossible for anyone to tamper with the data. Consumers want more access to simplified crypto transactions as it is completely anonymous, globally accessible, faster, and less expensive than traditional transactions. Although cryptocurrencies offer several benefits, they still lack the reliability, security, and regulatory compliance of traditional financial services. Many crypto owners want to see established financial services companies enter the crypto space to offer more reliable and secure services.

Business owners also recognize the advantages of integrating crypto into their merchant services. In fact, by 2025, 75% of American merchants plan to accept cryptocurrency payments.Accepting Bitcoin or other cryptocurrencies can allow businesses to reach a new customer base and therefore increase revenue. Additionally, crypto payments eliminate chargebacks and have lower transaction fees compared to traditional payment methods, which saves businesses money. The reality of the evolving payments landscape increases consumer awareness and appetite for crypto; lending itself to rising trust and consumer confidence.

Conclusion

While the volatility of crypto markets may persist, the growing adoption and integration of crypto into our everyday lives is inevitable. The endorsement of digital assets by the actions of banks and financial institutions fosters credibility and awareness, while promoting industry growth. The expansion of crypto into everyday transactions presents a significant opportunity for financial services companies to create new business models and offer more cost-effective and innovative services. Finally, consumers are demanding the increased benefits of transacting with crypto but want financial services companies to join and regulate the crypto ecosystem. As crypto becomes more mainstream, it will continue to transform the way we think about traditional finances, but one thing remains clear – there is no stopping crypto.