Crypto has arrived

Once dismissed as a passing fad, cryptocurrencies are here to stay. Some people have made fortunes while others have lost out, but the digital tokens are gaining greater acceptance as an investment and a form of payment. As the trend strengthens, the likes of Bitcoin and Ethereum are set to become part of our day-to-day lives. Here's what the future would look like.

- TOM WATSON

It’s hard to think of a topic in the financial world that has sparked as much discussion, debate and controversy over the past decade as cryptocurrency.

And no wonder. For many, their first introduction to cryptocurrency, and Bitcoin in particular, will have come in the early 2010s through headlines about its use in funding illicit purchases made on underground marketplaces such as Silk Road.

Others may have watched the wild run-ups in 2018 or 2020 when investors jumped on the crypto bandwagon, only to see the value of their investments nosedive. And some will have read about the numerous scams and scandals that have plagued the sector in recent years.

It’s fair to say, then, that there are plenty of people who view cryptocurrency with a healthy dose of scepticism.

There is, of course, the other side of the coin. Cryptocurrency has delivered substantial returns and, in a handful of cases, serious wealth to some investors. It also represents a future payments world which, some hope, will be less beholden to traditional financial players and middlemen.

Love it or loathe it, one of the big questions is whether cryptocurrency is here to stay. At this point, it’s hard to argue that it isn’t – an argument that has been lent more credence by some major recent decisions from financial agencies and governments.

Most notable among those is the US Securities and Exchange Commission’s decision to greenlight the first crypto-backed spot exchange traded funds (ETFs), which – though not the intention of the SEC – has boosted the legitimacy of certain cryptocurrencies as an investment vehicle in the eyes of some.

So, for the crypto curious or crypto latecomers, what is worth knowing about cryptocurrency itself, the technology behind it, its popularity as an asset and its potential as a payment tool? Let’s dig in.

What is cryptocurrency?