The crypto market is one of the newest emerging markets in the digital age. Known for its yo-yoing, yet parabolic value, millions of investors – institutional ones included – have piled into crypto startups over the past few years. And for many potential startup founders, this has made the crypto market a very tempting choice.
However, as you might imagine, in such a volatile space, there are plenty of trials to navigate to truly enjoy success in the crypto sphere. Read on to discover five key challenges most crypto startups will need to tackle.
Regulatory moves
The crypto market may be coming to the end of its ‘Wild West’ phase of little or no regulation. As market caps have grown and the dizzying ups and downs of coins and companies attract the attention of the press and public, lawmakers are looking in the direction of crypto with concern.
This isn’t necessarily a bad thing, as more regulation will legitimise crypto and encourage its spread, but it’s crucial startups keep an eye on the horizon. Here, gaining the insights of specialised technology lawyers can be extremely valuable in navigating towards growth.
Slow uptake
While crypto isn’t all about coins, it does certainly lend itself well to some market segments over others, meaning its uptake will be much stronger in some segments compared to others. How can startups work out which segments will be laggards? By looking at the fundamentals. Take the blockchain – it’s a public ledger, so it’s unlikely that it’ll see significant uptake in segments where transaction privacy is critical.
Volatility
It’s a fact that crypto is volatile. Bitcoin recently over half its value between November and February 2022, showing just how wild investor sentiment can be in the space. Part of this is down to the spectre of the regulatory moves, as well as the nascent nature of many crypto startups. For the time being, startup founders must develop an iron will to keep going, even when faced with such choppy waters.
Expertise
It’s tough to find crypto talent. While a crypto startup founder might have the right skills to get their business off the ground, to scale you need people, and in such a new and risky field as crypto, people are in very short supply indeed. What’s more, as with any Wild West, there are plenty of nefarious actors working within the crypto sphere, and the whole situation can – and perhaps should – put founders on edge regarding who they bring in.
Publicity
There have been plenty of scams in the crypto space over the years, and there are countless stories of investors losing significant amounts of money due to the limitations of the technology. Crypto founders need to bear this in mind, investing in marketing to win over detractors and rise up above the rest.
