Major Issues Related to Cryptocurrency Today

The world is slowly and gradually moving towards being entirely digital. This means that everything is virtual. You don’t even need to step out of your house to do any task yourself. With the click of a button, you are able to make huge purchases, sell off your merchandise, pay all your bills and even book an entire trip to a country far away from you. 

Not far away is the time when the payments will be done in crypto only. Sellers will only accept crypto as a legit form of currency. Right now, however, there are some issues related to crypto. These issues are the major reasons why people avoid making it their major form of investment. 

In this article, we will discuss some of the most prevalent issues that are associated with cryptocurrency and its usage. But if you want to get more information about cryptocurrencies you need to check this detailed article on the rise of cryptocurrencies.

1. Governments are Unsure

Where some countries are making crypto a legit form of currency, others are banning it left, right and center. For instance, El Salvador is the first country to have legitimized crypto as the real form of currency. The residents of the country can buy and sell their products using bitcoin. On the other hand, there are countries that are skeptical about doing so. 

The major example is that of China. It has put a blanket ban on the usage of crypto be it trading or investing. Hence, the crypto traders, in that country, had to fly away overnight to have a safer environment of trading.

The international financial regulatory authorities have also come up with varied reactions when it comes to talking about crypto. For instance, the heads of the IMF, an international monetary fund, were initially quite aggressive towards the prevalence of cryptocurrency. However, now the attitude has become highly indifferent! 

New regulations by the parliaments are in the offing. This is majorly to curb the issue of money laundering. There are reports of crypto being used by terrorists in their nefarious activities. This is why regulatory action would be taken, ensuring that no further illegal transaction takes place under the blanket of crypto trading.

2. Inheritance Confusion

A lot of people tend to invest heavily in crypto. They buy multiple coins and then use the bitcoin trading software to manage them. This way, they are able to make heavy profits from their crypto trading. However, what to do when they pass away suddenly? Who is to inherit the profits made? 

As the system of cryptocurrency trading and investing is highly irregular and there is no central authority to manage the rules and regulations, assessing the funds made by them and determining who gets them as an inheritance is a major loophole.

The Government has been working on this problem and trying to come up with a solution to it. If there is a feasible answer available, making heavy investments and trading enthusiastically would become possible for the traders.

3. The Market Volatility

This is surely the biggest concern of the investors. It is also the reason why most people avoid venturing into this industry. The market of crypto is highly volatile. As a result, it makes the investors quite insecure about their investments. One shift in the market and you may end up losing all your money and funds invested in crypto.

The prices of cryptocurrencies keep on fluctuating. There is a reason why this happens! The demand and supply rule affects the market and makes it volatile. The hype created by the media, sentiments of the users, and regulations by governments come together to decide the way the market would work. Together, they make crypto a highly volatile market, leading to it being extensively risky.

4. No Stabilization Forces

Compared to the regular, fiat currency that is backed by gold reserves, cryptocurrency doesn’t come with any such backing. Hence, it becomes an insecure currency that can’t compete with the regular currency. There is nothing to stabilize it. 

The buying and selling of crypto are unstable. Market operations of buying and selling currencies to make them regular do not apply to crypto, hence its trajectory is always filled with risk and uncertainty. Eventually, it is considered as a speculative investment asset and not something that one can use to buy or sell merchandise.