What's Stopping Crypto Markets From Entering the Mainstream?

The crypto market is still in its infancy, and a number of things are keeping it from entering the mainstream. These include a lack of regulation, pay-to-play market-making, and inexperienced investors. To get to the core of the problem, the market needs to balance the rewards and risks.

#2 Regulations Are Still Unclear

While the recent ICO explosion has increased public awareness of crypto, the regulatory landscape is still unclear. A recent study by Pew Research, a nonpartisan think tank in Washington, DC, showed that 16% of Americans are aware of, and have used, cryptocurrencies. Similarly, Newsweek Magazine cited a survey conducted by New York Digital Investment Group that found that 46 million Americans are aware of, or have at least invested in, cryptos. This is close to 14% of the U.S. population.

There are two main governing agencies that have some authority over cryptocurrencies: the SEC and the CFTC. They will likely play a crucial role in overseeing crypto trading platforms and exchanges. These agencies will be concerned with the overall structure of the market and potential market manipulation. The SEC and CFTC will be in charge of protecting investors, as well as policing and enforcing the rules. In addition, the CFPB will have input on stablecoin use cases that will trigger federal consumer financial protection laws.

Regulatory approaches vary widely from jurisdiction to jurisdiction, but the UK recently amended its ban on marketing or selling crypto-asset derivatives to retail investors. The FCA is currently consulting on further restrictions.

#3 Trading Knowledge is a Scarce Resource

If you're interested in investing in crypto currencies, you should research the market thoroughly. The price of a particular cryptocurrency can vary by ten percent or even fifty percent each day, making it crucial for traders to know as much as possible about the specific market. Also, you should understand the blockchain and its supporting technologies. This will help you protect your digital assets and make the most of market opportunities.

#4 Inexperienced Investors

Cryptocurrency is a relatively new market and many investors are not familiar with its intricacies. This makes the space difficult to navigate, and the lack of tried-and-true investment methodologies compound the problem. The good news is that new products are emerging that aim to address this problem. One such tool is CryptoHopper's trading bot, which allows investors to develop a successful trading strategy and get on-the-ground training.

The use of pay-to-play market making is a key problem. This practice runs counter to traditional regulatory efforts and fosters uncertainty regarding digital assets. Although an investor doesn't need to be an expert in crypto to invest in the market, he or she must have a good understanding of the metrics that make up its value. Many cryptocurrency platforms are willing to pay to pump cryptocurrency prices, so it's imperative that investors rely on the integrity of these metrics.