As the cryptocurrency industry continues to recover from the turbulence of last year, blockchain protection firm Coincover reveals that the sector took a major hit as a result.
This comes following a new report carried out by Coincover, which surveyed over 16,300 people, found that the two most significant barriers to mass crypto adoption are volatility and security risks.
The research, which is also based on an extensive literature review and interviews with market experts, analyses the reasons for crypto’s current reputation, questions whether this is justified, and advises on confidence-building measures to help the industry move forward.
The report argues for the creation of voluntary industry standards, alongside mechanisms for users to identify providers that adhere to these standards, encouraging an environment whereby consumers move to these recognised providers.
David Janczewski, CEO and Co-Founder at Coincover, stated: “Crypto’s potential is huge, but our research makes clear that the industry must take steps to address consumer concerns.
“Many still perceive cryptocurrency as a mysterious technology and the industry must show that it is doing everything it can to protect investors, build consumer confidence, and provide stronger foundations for the future.”
Among the obstacles surveyors said the industry needs to overcome were security worries (52%), trust issues (30%), technology concerns (30%), scars from the FTX collapse (20%), and the ever-present danger of crypto-related scams.
Janczewski added: “The industry can do more to protect users and reduce risk. We must develop clear standards and adopt best working practice principles. By doing so, we can reduce security risks, prevent reputational damage, and help to build confidence among users. Organisations which adhere to standards will become easily identifiable, and force out untrustworthy entities.”
Despite the rise in concerns, Coincover outlined that crypto adoption is still seeing steady growth, outlined by 17% of those surveyed revealing they own a form of cryptocurrency with 30% stating they are likely to invest in the next 12 months.
Furthermore, 50% of respondents are positive about their financial returns from crypto holdings, with a further 55% ‘crypto-curious’ about the industry.
Regulation around crypto has been at the forefront for many global policymakers and has been discussed at length all year as a potential catalyst to help increase crypto adoption but, more importantly, to maintain investor protection.
Ian Taylor, Head of Crypto and Digital Assets at KPMG and Board Advisor at CryptoUK, believes regulation can become the first stepping stone towards wider protection to ease consumer concerns.
He said: “Self-regulation is something that we’ve been working on as a global industry for a long time to support government entities, as well as international standard setters that develop the frameworks that get passed down to individual competent authorities.
“In a new industry, that’s the first stepping stone to providing codes of conduct for members, and a set of rules that protects against harm to clients.”
