Cryptocurrencies suffer from their volatile nature causing lack of public trust and investment appetite. However, virtual money “got a big future” but in order to get there, the first wave of it – such as Bitcoin – may have to step aside, a British academic told Sputnik.
“There is a lot of innovation to make cryptocurrencies safer, more trustworthy and more evidence-based in the public domain. So when you Google a particular cryptocurrency, you would go to a website that has been reviewed properly — as you would do with any bank. You wouldn’t take a risk with any website you have never heard of. As all the big financial institutions are developing their own cryptocurrencies, it could be that Bitcoin and other first-wave cyptocurrencies will fall away. You need to make sure the value of your cryptocoins won’t fall way when those organizations do,” Paul Levy, author and senior researcher at Brighton University told Sputnik.
His comments come amid the release of a new survey on perception and future impact of cryptocurrencies by ING International Survey Mobile Banking. According to the research, cryptocurrencies may go mainstream in the future but the current general feeling is that “the trend is complicated or hard to understand.”
Future of Spending
About a third (35%) of ING respondents in Europe agreed Bitcoin is the future of spending online and 32% agreed cryptocurrency is the future of investing. Generally, mobile bankers were more likely to believe cryptocurrencies are the future of investment and that their value will increase in the next 12 months.
The authors of the survey also suggested that cryptocurrency might be seen as more promising in countries where the traditional financial system is less efficient or more expensive to use.
Further, with the rise of mobile banks, such as Monzo Bank in the UK, traditional banks are faced with the need to make banking simpler and cheaper. Mr. Levy said that while “banks are trying to clean their act up,” Bitcoin hasn’t “proved itself to be any better.”
Specialist websites seem the preferred source of information on potential Bitcoin investments in 11 of 15 countries, the survey reported. However, a significant slice, in every country, answer: “I would never invest money in cryptocurrency.”
“The world of cryptocurrency will have to get much closer to the almost immediate, ‘plug and play’ ability to buy virtual currency. A lot of websites are doing it but that PR activity hasn’t yet worked; people don’t believe or trust them,” Mr. Levy told Sputnik.
So is it worth sticking to cryptocurrency in the long run?
Mr. Levy believes the world of cryptocurrency has still to prove itself.
“If I were investing in it, I would either have faith in it in the long run or have fun with it. Cryptocurrencies are a bit like the pyramid marketing scheme where a few people make money early and everyone else then buys, which drops the price.”
The historic legacy of how cryptocurrency emerged from the Dark Web to mainstream platforms still has an impact on buyers, Mr. Levy said.
“Bitcoin began and is associated with the Dark Web. You may remember the Silk Road, which was below the radar of people like you and me. The activity was happening on the Dark Internet, including drug deals, weapons sale and passing money in a secret way — things that not everyone trusted. There is still that legacy affecting us,” the academic told Sputnik.
According to the survey, many respondents still see cryptocurrency as rather risky and perceive it as a riskier investment than cash, gold, real estate, government bonds, investing in your own business, or the share market.
The generation of 20-25 year olds, who found their data being recorded and shocked about being sneaked on, don’t trust anything online, Mr. Levy said, adding young people won’t trust Bitcoin so easily.
An older age bracket — who have been battered in the past — are more likely to take risk with Bitcoin and other cryptocurrencies in the same way they have been buying stocks and shares over the years, according to the Brighton University researcher.
The data presented in the ING survey Cracking the Code on Cryptocurrency has been gathered in March 2018, by when Bitcoin prices slid back to $6926, after rocketing to $13,860 in December 2017.
READ MORE: Bitcoin Rollercoaster: What Happened, and Why?
The views and opinions expressed by the speaker do not necessarily reflect those of Sputnik.