Collective Shift chief executive Ben Simpson tells the latest FINSIA Podcast that disruptive digital currencies will survive in the same way Amazon and Microsoft flourished after the dot.com collapse.
"The reality is that people lack trust in the space," said Simpson, acknowledging the growing scepticism that was highlighted by surveys carried out in 2022 and 2023.
"There's a lot of stuff that happens that isn't great. But the reality is that new technology attracts people who want to make money quickly. It just happens.”
But in the same way that Amazon and Microsoft emerged from the dot-com era while many other websites vanished, the same will happen in cryptocurrencies, he says.
As the years go by and business models get refined, there will be a rise in trust in the sector.
The entry of institutional investors, like BlackRock, into the crypto space will enhance credibility, he says.
It’s not just some random guy in his bedroom talking up the chances of striking it rich overnight.
Institutional involvement brings validation and reassurance, as it indicates a shift from a niche interest to a mainstream financial asset class, according to Ben.
Highlighting one of the advantages of cryptocurrencies, he said the transparent nature of blockchain technology would help instil trust. Unlike traditional stock markets, where transactions are often concealed, every crypto transaction is recorded on an immutable ledger visible to anyone.
"With on-chain analysis, we can track and see who's buying and selling crypto at any given time of the day," he explained.
While he was bullish about the prospects for cryptocurrencies, Ben maintained there was a need for education and awareness across the investment landscape.
Institutions need to ensure practitioners and consumers have a deeper understanding of blockchain technology so they can weed out reliable information from the hype.
Download the podcast here …. https://finsia.podbean.com/e/are-institutional-investors-helping-instil-trust-in-crypto-in-2023/
