Key Takeaways:
Crypto investors shouldn't be too focused on short-term swings because prices will become less volatile as adoption expands, according to Ivan Soto-Wright, co-founder and CEO of MoonPay.
Spot on. Seldom do we hear such relevant advice in the crypto space. If you are a long-term investor the volatility in the crypto market should be considered as just noise. History of bitcoin itself will show that. The initial price of Bitcoin was just a few cents and today it is about $40K. If the long term investors in the initial stages were worried about volatility, they wouldn't be reaping the capital gains. Since only now cryptocurrencies are being adopted by institutional investors and retailers, there is still a lot of scope for price appreciation of cryptocurrencies in general and Bitcoin in particular. Of course, his advice is not meant for investments in shit coins.
He said it's only expected for regulators to take their time in making sure customers are safeguarded, and for crypto-focused companies to find the right balance between financial innovation and customer protection.
Crypto-focused companies which do not emphasize customer protection are likely to find themselves losing out to competitors who do. Savvy investors look for companies that provide a balance and not just profit. Protecting your investment is as important as making investment gains.
"The great thing that will make the industry thrive in the long term is having clarity over what those rules are in different parts of the world," he said. "Regulators are always a couple steps behind the financial innovation component, and that's where some of the friction arises."
Again another astute observation. Friction arises because of the lag between financial innovation and regulations. Until regulations catch up with innovation, expect friction.
He said crypto skeptics are right in that digital assets cannot be used to buy something as simple as coffee, but waves of adoption are yet to come in and allow for scaling to everyday use cases.
But as more people enter the crypto-economy, it will progress and become less expensive to make transactions, just like telephonic communication evolved from pricey long-distance phone calls, to free video-conferencing over the likes of Skype and Zoom, Soto-Wright said.
We often forget the lessons of history until someone reminds us. Timely reminder!
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