How Do You Fix the Stigma of Cryptocurrency?

When you hear the word "crypto," what does it mean to you?

Is it a positive or negative association?

When you look up the word "crypto" in the dictionary, you'll find it's derived from a Greek word that means "hidden." Whether we know it or not, words carry a lot of power. So it's not a surprise that cryptocurrencies have always had an air of mystique associated with them. Adding to the secrecy is crypto's reputation for being the preferred mode of transaction for hackers. These associations, no matter how small one might think they are, lead to the ideas of secretive people in face masks studying dark screens replete with code and numbers in underground bunkers.

The initial anti-establishment rhetoric of crypto doubtlessly made it a darling of Gen Z and younger millennials. But the industry is approaching an inflection point in terms of maturity. In order to survive and grow into its next phase, cryptocurrency needs to find its place in the common parlance of a much wider audience.

The research group OpenSecrets recently reported that the cryptocurrency industry has increased its lobbying efforts and put $73 million into the 2022 elections. For industry watchers, it's clear that the crypto community is anticipating a regulatory crackdown, and the lobbying efforts are intended to moderate the impact. It's never been more urgent for the industry to be understood and adopted by a wider audience. But to achieve general acceptance, crypto is in dire need of a makeover from being a splashy high-risk, high-reward niche with tech-savvy 20-year-olds as gatekeepers.

Doing away with the mystique — putting together the recipe for a crypto rebrand

As said previously, a name carries a lot of power, and a negative name can tarnish a brand or product irreparably. What happens when a company faces a scandal or completely changes direction? A rebrand. If any cryptocurrency wants to make it to the big leagues, it must find a way to rebrand crypto as a whole or distance itself far enough from the idea they are "hidden" or "secret."

In fact, the idea that cryptocurrency is a secret way to transfer money is actually an oxymoron. The blockchain is made up of millions of public ledgers that are meticulously kept to ensure that every small transaction is visible to the people who have the right to see it. If anything within a block is changed, anyone looking at the block can see it happened. The blockchain is the opposite of cryptic, and everything associated with it — name included — should reflect the truth, so more people understand this.

Lessons From Losing a Third of Crypto's Market Capitalization

The recent crash in crypto valuation has given many investors pause. While a general market drawdown is hardly a novelty in the volatile valuation history of cryptocurrencies, the brutal correction from the all-time high in November 2021 to a 50%-70% correction in prices in 2022 (some coins corrected by 90% or more) goes beyond all rational risk-taking.

There is no denying that larger macroeconomic factors were at play, including untamable inflation, the liquidity crunch and rising interest rates. Crypto also tends to follow the recent trends set by the stock market that continually trended downward throughout the year. But while other asset classes also suffered, few have experienced a drawdown beyond the point of no return, like Terra Luna.

Crypto Must Appeal to a Broader Audience

Now that the industry is maturing, it is critical for cryptocurrencies to shed the air of mystique surrounding them. This means less volatility, more transparency and awareness. I think the best way to make cryptocurrencies more acceptable to the masses is to add stability by ensuring they will always represent value — for example, precious metals or the value of proportional fiat currencies.

I understand that the core crypto audience has significant reservations about letting governments back currencies. One way to resolve this could be to back the currencies with a basket of the most-valued fiat currencies, including the Euro and Dollar. That way, the currency is not controlled by any individual government but, say, backed by the top five of the world's largest economies. The combined size and value of such a currency will be bigger than any exchange or cryptocurrency we currently have.

In my opinion, lowering the volatility of cryptocurrencies by backing them with a basket of fiat currencies is the first step. The next step would be to make this currency exchangeable into cash at any time. This is critical in attracting a much larger, more risk-averse audience base beyond the high-risk appetites of 20- to 30-year-olds.

The focus needs to shift from the cryptocurrency being able to break the sound barrier in reaching unimaginable heights of valuation to actually being stable and useful enough for the average Joe. We must make cryptocurrencies better than simply a tool for clandestine transactions far from the government's prying eyes. Cryptocurrencies need to become useful assets in the lives of common people.