Since its emergence, crypto has been labeled as one of the tools for actualizing financial freedom. This is ultimately due to its promise of full decentralization. With this, the innovation has continued to disrupt the status quo in the world of traditional finance. Don’t forget that the centralized nature of traditional finance positions the financial interest of individuals in the hands of authorities. Also, the numerous crises that greeted the world of traditional finance between 2008 and 2012 triggered the passion for the creation of crypto.
With the emergence of crypto, people believe its full promise of decentralization would help wrestle power away from centralized authorities. When people hear the word “crypto,” what comes to their mind is freedom and liberty. Over the years, the innovation has to an extent lived up to the expectations of many, onboarding millions of unbanked people. Today, crypto has witnessed massive growth in popularity and mainstream adoption, boasting over $1 trillion in market cap.
Growing adoption of Crypto
Scores of individual and institutional investors have ventured into the potential of crypto. They see it as a better alternative to fiat and a great hedge against the rising inflation in the global economy. Bitcoin, for instance, has become a legal tender in El Salvador since 2021. More so, prominent firms like Microstrategy, Tesla, and many more are renowned investors in Bitcoin.
Tesla, for instance, supports Bitcoin as one of the payment options on its network. Likewise, there are numerous e-commerce companies that have embraced crypto payments. Some of them include Crypto Emporium, AT&T, Microsoft, Twitch, Ralph Lauren, Beliani, Safari Guru, and several others.
In Crypto Emporium, for instance, you can buy luxury watches, electronics, digital creatives, property, and automotive amongst others in Bitcoin. In fact, the prices of all the products in these categories are denominated in Bitcoin. Outside Bitcoin, it also accepts altcoins, particularly Dogecoin. As crypto continues to grow, more companies are expected to embrace the instrument as a payment method. In the next session, we analyze if crypto can truly achieve financial freedom.
Is financial freedom truly possible with crypto?
Financial freedom is entirely possible to achieve with the adoption of crypto. There are factors that could make or mar such pursuit. Focusing on factors that could facilitate financial freedom, regulation is one of the foremost agents. Regulation can obviously curb or enhance the effectiveness of this promise of cryptocurrency.
Without a doubt, crypto has every element that ensures one’s freedom and limits exposure to central banks. However, a bad regulatory environment could limit such freedom, leaving the industry and its investors to struggle. High tax rates, unclear registration process for Virtual Assets Service Providers (VASP), and dependence on central banks are elements of bad regulatory policies.
On the flip side, a good regulatory policy will support the industry to grow. Therefore, ensuring that corporate and individual investors all get a good supporting atmosphere. With that, there is surely a high tendency for cryptocurrency to fulfill its promise of financial freedom.
Furthermore, bad actors are another factor that could either affect the fulfillment of this promise or support it. Bad actors are hackers, mismanaged projects, and rug pullers. Their heavy presence in the industry is to the detriment of it. Consequently, they prevent the industry from growing as most of their activities often squeeze out every available penny from investors.
Through their continuous operations, crypto cannot fulfill the promise of financial freedom. However, a good regulatory policy can protect investors against this set of market participants. Ensuring that every of their traces no longer exists in the market. Barring bad actors from the crypto market will go a long way to ensure the fulfillment of the financial freedom promise of cryptocurrency.
Conclusion
To an extent, crypto is naturally endowed with every needed element that will help ensure it attains this promise. Meanwhile, the aforementioned factors can hinder it from fulfilling it. It is an issue of collective efforts from every market participant to ensure that crypto achieves this stature.
Lastly, one can confidently say that crypto can achieve the promise of financial freedom. This is due to its libertarian policy that focuses on reducing exposure to centralized financial institutions. The only arsenal that could militate against this focus is market participants.