Is 2024 A Crossroads Year For The Mom-And-Pop Crypto Trader?

The year began with a watershed moment for crypto, when the SEC finally approved Bitcoin spot ETFs after numerous delays and countless applications. Billions promptly flowed into these strategies and, though there is a wide range of differently-sized funds in the sector, the iShares Bitcoin Trust holds $17.5 billion as of 25 March. It only opened on January 5.

One step forward…

The news dominated the crypto industry and, in a telling move, entered the mainstream. Major news outlets covered the news, ‘Bitcoin ETF' trended on X for days and as a search term ranked peak popularity on Google that same month. 

Inside the industry, we all know what this excitement was really about. Billions flowing into a handful of Bitcoin spot ETFs was of course thrilling but this was potentially the beginning of crypto finally being accepted into the mainstream. 

The legitimacy the SEC bestowed upon Bitcoin could now be extended. The US regulator has already begun subpoenaing companies involved in the Ether network in an effort to classify it as a security. Further afield, there are rumours of crypto ETFs being explored in other jurisdictions and the London Stock Exchange has announced it will accept applications for Bitcoin and Ether exchange-traded notes in May. Against this backdrop, there are also general positives for traders. Many cryptos have begun to rally again and Bitcoin's next halving is due to occur in April 2024. 

…Two steps back

Despite this progress, there are still concerns around crypto and negative reputations persist in some corners. Tellingly, when the SEC approved Bitcoin spot ETFs, the regulator's chair Gary Gensler issued a less-than-glowing statement about crypto in general. In his remarks, he said: "Bitcoin is primarily a speculative, volatile asset that's also used for illicit activity including ransomware, money laundering, sanction evasion and terrorist financing." The SEC's approval of Bitcoin spot ETFs may have been a welcome step for the crypto industry, but it is clear the authorities still have a negative opinion about crypto in general.

The reasons for this are not hard to see. Throughout 2023, the repercussions of the FTX scandal continued to unravel due to high-profile court cases involving founder Sam Bankman-Fried. This occupied the headlines and a global hit true crime documentary on Netflix, Bitconned, did little to repair this reputational damage. 

Bankman-Fried wasn't just on trial – all of crypto was in a way, and the ‘crypto bro' culture that was given heavy press coverage continued to push new adopters away from this innovative area of finance. At its core, crypto is designed to improve financial inclusivity and foster greater interaction with the markets. Unfortunately, this tarnished reputation undid a lot of this work and this is clear in data around the adoption of crypto.

Public sentiment warming but concerns remain

Digital security consultancy security.org recently produced a report into crypto adoption among the US public and the findings made for mixed reading.

First, a number of data points were very positive. Crypto awareness and ownership rates have increased to record levels with 40% of American adults now owning crypto, up from 30% the year before. This could be as many as 93 million people. Inclusivity is also improving among this cohort with female crypto holders also surging from 18% to now 29%. Encouragingly, this seems to be a departure from ‘fad finance', with 63% of current crypto owners reporting they hope to obtain more over the next year. 

These kinds of statistics will be welcome news to anyone working in crypto and, hopefully, suggests a potential change in sentiment. Could crypto soon lose its mystery and stigma in the eye of the person in the street?

Unfortunately, the security.org report showed there are still signs that crypto has a perception problem. When asked to identify their greatest concern regarding crypto, a lack of government oversight and difficulty trusting exchanges were among the most commonly picked reasons. While more non-owners picked out lack of regulation as a key concern than owners (26% vs 10% respectively), exchange mistrust was picked by 14% of both respondent segments.

The fact that more respondents in general chose these kinds of issues over cyber-attacks or lost access is troubling. This shows the public has stronger, and more negative, feelings about the crypto industry than crypto in general.

A friendly face

Regulators are already tackling this issue from their side, with new laws being prepared in numerous jurisdictions aimed at improving investor protections and crypto education in general. However, the industry has a clear role to play. This means designing digital finance products and customer experiences that cater to the mom-and-pop traders, who are willing to engage with crypto but in a secure and risk-averse fashion.

Yield App is a digital wealth management platform with good UX and a risk-averse approach that is doing just this. Its clean and professional look is designed with mainstream investors in mind, and moves away from the potentially off-putting and immature tone associated with ‘crypto bro' culture. This goes beyond the look and feel of the platform and extends to how products are designed too. 

Yield App's core offering is built around passive yields. Typically, passive yield generation strategies are associated with high-risk schemes. In a departure, Yield App generates yield for investors without providing money for on-chain lending or MLM schemes. It uses market-neutral strategies with a risk-averse approach to generate yield on deposits of well-known cryptos such as Bitcoin, Ethereum, USDT and SOL. And although the yield generation may be passive, the team at Yield App support this with a decidedly active approach. Due diligence is central to the platform's client proposition, with investors benefiting from a combination of in-depth research and risk mitigation from Yield App's portfolio management team (as well as external audits and ongoing third-party risk monitoring protocols). 

This is all complemented by some simple, yet very impactful, developments. Friction for newcomers is eased through a seamless account setup process and effortless KYC check procedures, and the platform accepts deposits in both euro and sterling. A range of lock-in periods are also available, designed to give the more nervous newcomers some added flexibility. Ultimately, many newcomers to crypto will have had their interest piqued by the potential to have an early-mover advantage and boost their earning potential in this new and evolving area of finance. Highly competitive APYs of up to 25% on Yield App will also help mom-and-pop traders ‘take the leap' and begin their crypto journey with the platform.  

There is more to crypto than passive yields and this can often be just the start of a newcomer's journey in this space. Yield App has taken it upon itself to guide these newcomers further and open their eyes to other possibilities in crypto. The Yield Pro suite is a case in point, offering those who have gained crypto trading expertise more complex strategies to enhance their yields. The addition of a launchpad, which Yield App announced will launch soon, is another step in this direction that will grant retail users the opportunity to invest in carefully vetted start-ups. 

Slow and steady wins the race

One of the thrilling parts about investing in crypto is the dynamic nature of this world of finance, where innovations are being continually unleashed to the market and there is the potential for tokens to sharply surge in price. 

However, this is a departure to how many retail investors feel about money. Most people are inherently risk-averse when it comes to their finances and fear of losing money will often hold people back from investing in even the most vanilla of equities and bonds. This means a change of strategy is likely needed to improve retail engagement with crypto, allowing these newcomers to get up to speed before they are full-blooded crypto traders.

This will not be achieved overnight. Regulations from policymakers will go some way to improving investor protections and legitimizing the space, but winning over retail investors' trust will take time. Crypto wealth management platforms can play a valuable role here in the daily interactions newcomers will have when they are taking their first steps into crypto. User experiences, and product offerings, designed for retail traders – the mom-and-pop persona, not the ‘crypto bro' – will likely play a critical role in this crossroads year for crypto adoption.

This post was authored by an external contributor and does not represent Benzinga’s opinions and has not been edited for content. This contains sponsored content and is for informational purposes only and not intended to be investing advice. Cryptocurrency is a volatile market; do your independent research and only invest what you can afford to lose. New token launches and small market capitalization coins are inherently more risky than large cap cryptocurrencies. These tokens are subject to larger liquidity and market risks.