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Variables Influencing Cryptocurrency Use

The growth of the crypto market in 2021 has fueled interest in digital assets from various companies worldwide.

Hillary Walker

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The growth of the crypto market in 2021 has fueled interest in digital assets from various companies worldwide. If earlier only those companies that sincerely believed in the formation of the crypto industry invested in cryptocurrencies or introduced them into business processes, now it looks more like a trend. However, several factors are influencing the use of digital money.

Difficulties in Banking Transactions

Businesses use cryptocurrencies to streamline business processes. It is impossible to change or delete information from the blockchain when it is already there. In addition to eliminating the abuse of office by individuals of any company, it is even cheaper and more convenient.

Companies exchange crypto at SushiSwap to conduct cross-border transactions. Compared to banking services, this method differs in speed, minimum fees, and the ability to complete a transaction at any time.

Many companies around the world accept cryptocurrencies as payment for their goods or services. This is a good investment instrument that does not have a clear legal background, so accepting payments, for example, in Bitcoin, will be much more profitable for a company than in fiat currency.

 

Volatility

Many coins do not have an underlying asset, so it is almost impossible to predict what will affect their value. In addition, some cryptocurrencies do not have high liquidity, which can also cause a significant jump in prices when making transactions.

Bitcoin guides many alternative coins. In the event of its rise or fall, their rates also change proportionally. This factor affects the distribution of crypto transactions since it is quite difficult for the buyer of goods and services to predict their value in fiat currency.

Legalization

In some jurisdictions, the crypto industry has already been transferred to the legal environment. In others, they are just preparing for this. The more countries recognize cryptocurrency as a means of payment, the wider its application will be.

A crucial aspect of regulating cryptocurrencies in the legal field is the tokenization of assets. For example:

  • A person carries out a business and sells a particular commodity, for example, wheat.

  • He wants to raise funds to grow the crop.

  • To do this, he can issue a token that will be secured by the future harvest.

  • Through a public offer, acting in the legal field, a business person can declare that he is selling wheat of his future harvest, for example, one token = one ton of wheat.

One of the most influential factors is the bans on cryptocurrencies introduced in some countries. It can have a significant impact on the market as a whole. So, for example, after the closure of exchanges in South Korea, the global cryptocurrency market was in a fever for several weeks.

Inconvenience in Regular Calculations

Who will wait for the seller to close the deal if you have a credit card in your pocket that you can use to pay the bill in seconds? In addition, sellers prefer to value goods in fiat money, and if the owner of the cryptocurrency wants to pay the bill in crypto, he must use payment solutions that automatically convert the cryptocurrency to fiat. There are not so many such solutions on the market now.

Major global companies that announce that they accept cryptocurrencies for payment unwittingly drive up their prices. However, this is a normal process towards the widespread use of digital money.