Mainstream crypto adoption in the US continues to advance despite years of bad news about scams, leaks, and high-profile flameouts. Mainstream adoption is part of a larger transformation in the world of finance fueled by the rise of cryptocurrencies.
From Bitcoin’s initial surge to the emergence of diverse altcoins, cryptocurrencies have become a hot topic of conversation, investment, and even debate.
This blog post investigates the current (2024) state of mainstream cryptocurrency adoption in the US. We’ll explore what mainstream use means for the cryptocurrency ecosystem and examine the factors influencing its progress.
Signs of Growing Cryptocurrency Adoption in the US
Institutional Investment Surge
In late 2023 and early 2024, Blackrock pushed the SEC to approve the first Bitcoin spot ETF, resulting in a wave of other financial institutions following suit. While most mainstream investors are not eligible to participate, others may not fully understand what an ETF is.
The more significant point for crypto adoption is this: As the titans of TradFi begin to legitimize Bitcoin and push for regulatory clarity, the overall financial industry will follow suit. This involvement from major financial institutions like hedge funds and investment firms adds legitimacy and stability to the market, attracting further mainstream interest.
Mainstream crypto adoption in the US continues to advance. Key findings from Security.org’s 2024 Cryptocurrency Adoption and Sentiment Report state:
- 40% of American adults own crypto, up from 30% in 2023.
- Among current crypto owners, 63% hope to obtain more cryptocurrency over the next year.
- The rate of women’s crypto ownership increased from 18% a year ago to 29% at the start of 2024.
- 21% of adults who do not own cryptocurrency said the anticipated Bitcoin ETF makes them more likely to invest in cryptocurrency.
- 46% of those surveyed think Bitcoin ETF approvals in 2024 will positively impact the blockchain industry.
What Would Mainstream Crypto Mass Adoption in the US Look Like?
Mainstream adoption simply means widespread acceptance and integration of cryptocurrencies into daily life. Think of it like the early days of the internet, when high connection costs limited internet access to a select few. Now, the internet is an indispensable tool woven into the fabric of everyday life.
Today’s online banking experience still retains many annoying artifacts of the pre-internet era. While some friction is due to security concerns, most delays and expenses are rooted in legacy fee structures and brick-and-mortar holidays and schedules.
Many legacy banks don’t process transactions on “bank holidays,” as if there is a clerk behind a curtain somewhere who has the day off. Companies that process payroll for clients profit from introducing an artificial lag between receiving payroll from their clients and distributing it to employees. Banks still charge high fees for currency conversion and cross-border payments.
Imagine a world where domestic and cross-border payments are processed instantly for free or very low fees. No more waiting for your direct deposit to arrive on a Monday, even if they initiated the transaction on a Friday or before a bank holiday.
How would it feel if you could close on a home loan in minutes rather than days? Where investment transactions are automatically optimized for minimizing tax liability, and taxes, in general, are simplified and automated continuously, so there is no longer a dreaded April 15?
Cryptocurrency could help facilitate all of these scenarios and more. Mainstream use of cryptocurrencies would represent a shift toward widespread changes such as:
- Everyday Transactions. Imagine paying for coffee at your favorite cafe or settling your monthly utility bill using crypto as quickly as swiping a debit card.
- Investment Vehicles. Cryptocurrencies could become established investment options alongside traditional stocks and bonds, offering diversification and potentially high returns for investors.
- Financial System Integration. Cryptocurrency wallets and exchanges could seamlessly integrate with existing financial systems, allowing for easy digital asset conversion, transfer, and management.
Cryptocurrency could revolutionize the mainstream’s financial experience, from increased financial inclusion to fostering innovation within the financial sector. However, we must address several challenges before cryptocurrencies become truly mainstream.
Speedbumps For Crypto’s Mainstream Journey
While the winds of change are blowing in favor of crypto going mainstream, several roadblocks stand in the way of widespread mainstream usage. Here are some of the most significant hurdles:
Price Volatility and Market Uncertainty
The inherent volatility of cryptocurrency prices remains a significant deterrent for many. Dramatic price fluctuations can be unsettling for potential users, particularly those accustomed to the relative stability of traditional financial instruments.
Regulatory Ambiguity
The regulatory landscape surrounding cryptocurrencies is still evolving. The lack of clear guidelines and established frameworks from governing bodies creates uncertainty for businesses and individuals. This ambiguity hinders wider adoption as institutions and consumers wait for more precise regulatory direction.
Lagging Merchant Acceptance
While not widespread, there’s a growing trend of merchants accepting crypto for payments. VISA is prepping the ground for significant movement into cryptocurrency payments. As mentioned above, many US citizens and merchants await more transparent cryptocurrency regulation from the US Congress before using crypto as a valid currency. For example, Amazon put its plans for an NFT marketplace on hold.
Practically speaking, cryptocurrency is not yet feasible as a USD replacement for everyday routine purchases. No one wants to add the tax-time complexity of cost-basis calculations to their daily bitcoin-purchased lattes.
Security Concerns and Potential for Hacks/Scams
The ever-present threat of hacks and scams targeting crypto wallets and exchanges continues to cast a shadow over the industry. High-profile incidents erode user trust and raise concerns about the security of crypto holdings.
User Education Gap
The complexity of crypto wallets, transactions, and tax implications creates a significant user education gap. Many people lack the basic understanding to safely and effectively navigate crypto. This knowledge barrier discourages potential users from entering the market.
Limited Scalability and Transaction Speed
Technical limitations of some blockchain networks, particularly scalability and slow transaction processing speeds, can hinder user experience. Long wait times and high transaction fees can be frustrating for those accustomed to the near-instantaneous nature of traditional payment systems.
These challenges pose significant obstacles. Cryptocurrencies will only become a part of everyday life after we address these issues through technological advancements, more transparent regulations, and improved user education.
The Road Ahead: When to Expect Mainstream Crypto Adoption in the US
Predicting the future of any technology is an inexact science. Based on current trends, we can expect continued progress toward adoption by the mainstream. Here’s what the road ahead might hold:
International Pressures
The US isn’t alone in exploring crypto’s potential. Geopolitical shifts like Saudi Arabia’s decision not to renew the petrodollar agreement and the rise of other countries challenging the US dollar’s dominance as the world’s reserve currency signal a move towards a more diversified global financial system.
Central banks worldwide are actively experimenting with Central Bank Digital Currencies (CBDCs). The UAE and China’s advancements in this area pressure the US to accelerate its CBDC development to maintain its financial leadership.
Technological Advancements
Developers are constantly working on scaling solutions and improving transaction speeds for blockchain networks. As these efforts bear fruit, the user experience will become smoother, making crypto more accessible for everyday use.
Regulatory Clarity
As governments grapple with the implications of cryptocurrencies, more transparent regulations are likely to emerge. This will provide a more stable environment for businesses to operate in and inspire greater confidence among users.
Increased Security Measures
The crypto industry is implementing more robust security measures to combat hacks and scams. Advancements in encryption and user authentication will enhance security and build trust among potential users.
Enhanced User Education
Educational initiatives aimed at simplifying the complexities of crypto will play a crucial role. User-friendly resources and educational platforms can bridge the knowledge gap and empower individuals to navigate the crypto space confidently.
Cryptocurrency Tax Solutions
As crypto use climbs, navigating the complexities of crypto tax filing becomes increasingly essential. ZenLedger empowers consumers and investors with a user-friendly platform for seamlessly tracking, managing, and reporting their crypto taxes.
Moving Ahead with Mainstream Crypto Adoption in the US
The journey towards mainstream crypto adoption in the US is well underway. While significant challenges remain, positive signs indicate a growing public interest and a maturing market. By addressing volatility, fostering clear regulations, enhancing security, and prioritizing user education, the crypto industry can pave the way for broader acceptance and integration into everyday life.
Regardless of the timing of mainstream crypto adoption in the US, ZenLedger stands ready to simplify the tax filing process for all participants in this evolving financial landscape. Ready to learn more about simplifying your crypto taxes? Explore ZenLedger’s comprehensive suite of tax tools and resources to make crypto tax filing a breeze. Sign up for free today and unlock the power of effortless crypto tax management!
This material has been prepared for informational purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation.
