Volatility is the name of the game when talking about anything involving cryptocurrencies. Most projects are especially prone to crypto volatility, especially as they are just starting out. They can experience dramatic price swings and fluctuate by double-digits within a single day. 

On one hand, wild price swings can be a great way to make profits (if you are lucky enough). But others will lose those funds at the same time and that can trigger some unexpected and intense emotional reactions from investors who are affected by this crypto volatility. 

While most of our daily activities don’t account for too much for it, mental health plays a huge part in establishing a well-balanced lifestyle. However, we shouldn’t ignore it and it is required to always pay attention to any emotional responses that our day-to-day interactions might make us feel. For instance, financial events play a key part in our emotional well-being. Considering the current bear market, the constant despair from the volatility of crypto markets can cause serious mental health damage.

Most of the time, crypto investors hide behind faceless Twitter accounts and unknown blockchain addresses. But in May 2022, when the Terra ecosystem collapsed when the UST stablecoin depegged, all of those involved were affected. Having to see your life’s saving dissolve in a matter of hours is not something our brain can easily comprehend and, unfortunately, there were many suicide cases that followed. 

There is no way to predict where this bear market will take us, but we know for sure that we can’t control the crypto volatility. However, one thing we can control is the state of our mental health and the ways to improve it. 

What is affecting mental health?

Sometimes, you might not even know that what you’re experiencing might be a normal emotional response to an outside event. Actually, professional traders know this and spend years training to ignore their emotions when trading assets. 

But even with all the knowledge, if you are still new in the crypto trading space, you will be under emotional pressure at some point. And that’s when you will make poor trading decisions. 

Trading requires more than technical and fundamental analysis. A trading mindset is crucial. It’s a known fact that anyone can make disastrous decisions under the pressure of emotions. This can lead to serious financial losses. 

The best thing you can do is to know (and stay away from) the exact moments and situations that might affect your mental health: 

• Premature exit. Beginners are more likely to take quick profits after a successful transaction and then close the deal too soon. They lose part of the potential profits they might have made.
• Dependence on market participants. Many traders are influenced by signals and opinions from established market participants. However, to reap the greatest benefits, you must be independent of these factors. One such example is Dogecoin and Elon Musk’s tweets.
• Losses are difficult to accept. The cryptocurrency market is highly susceptible to emotional trends. The price of cryptocurrency will react immediately to various statements and rumors. It is not possible to eliminate the emotional influence.
• Euphoria after the first deal. A positive emotion that comes with the first profit can make the trader lose control.
• Gambler syndrome. This leads to taking uncalculated risks. For instance, investors may enter large transactions without really thinking about them.
• FOMO (Fear Of Missing Out). FOMO is a fear of missing out on potential deals. 

And as if that’s not enough to make you lose your reason, there are other external factors that might affect your trading positions. Hackers are a major concern in the crypto industry. Besides volatility, crypto assets are more susceptible to hacking and other scams due to their digital, anonymous, and decentralized nature.

What can you do about it?

Remember that it’s not all doom and gloom when it comes to trading crypto. In fact, you can still be involved in the crypto space and make money with crypto without a big (is any) upfront investment. 

However, not all crypto investors are mentally affected by crypto’s volatility. Most people do not become addicted or emotionally engaged in trading digital assets. Remember that trading cryptocurrencies can have serious consequences for your mental health and general well-being. It is crucial that investors decide how much risk they are willing to take to limit the psychological effects of cryptocurrency stress.

According to crypto experts, cryptocurrencies will have a greater impact on the retail industry in the future as more people invest in digital currencies.

Although the cryptocurrency market appears to be in a bear market right now, it’s not hard to see that the industry has grown tremendously over the past few years, especially when looking at adoption.

According to a recent study by Insider Intelligence, digital assets will be used more often by Americans to make daily purchases. The study suggests that we will see a 70% increase in the use of digital assets for purchases by the end of 2022. This is a significant increase from 1.08 million users (in 2021) to 3.6 million users. The global crypto transaction volume is expected to hit $10.4 billion this year. 

The volatility of the crypto market is decreasing due to the increased use of stablecoins as well as central bank digital currencies (CBDCs). This will lead to more people considering these digital assets to be legitimate payment options. According to the research, 12.8% (33.7 million people) of the US population will hold crypto by the end of 2022.

This number could rise to 37.2 million by 2023. This is a realistic figure, especially considering that the number of investors who have entered the global crypto market has nearly doubled in the past 12 months, particularly when you consider that there are many countries such as India, Brazil, and Hong Kong that have seen a significant increase in their investment. 

It’s time to see massive crypto adoption in retail payments

Max Krupyshev, CEO of CoinsPaid, a crypto payments processor, believes that cryptocurrency payments will experience exponential growth over the next three years:

“I think we will be able to talk about tens of millions of users in the United States alone by 2025. The American market is a fertile ground for any innovative solutions. Another factor driving crypto’s adoption as a day-to-day transactional currency is that it is becoming increasingly easier to buy, spend these assets with global brands.”

He also stated that Asia could surpass America when it comes to crypto payments. The region is flexible in accepting new and upcoming technologies. We should also be aware of the increasing popularity of cryptocurrency in African countries. There is a high demand for crypto apps as well as alternative investment tools with a low entry threshold.

Brandon Dallman, the chief marketing officer of the DeFi ecosystem Unizen, believes that the cross-border remittance and retail payments ecosystem had been dominated for a long time by a few players such as Western Union, PayPal, and Stripe. With the rise of cryptocurrency in popularity, people can now bypass issues such as middlemen and high fees: 

“Fast blockchain networks are suitable rails for CBDCs like the digital dollar, euro etc. The blockchain that is able to cater to the demand put forward by financial institutions like stock exchanges and clearing houses will win the battle. We are seeing banks of all sizes dip their toes in the water to see how they can start to interact with the new digital world in front of them, driven by a growing fear of being left behind.”

But crypto may not be for everyone

However, not everyone is on the same page when it comes to the crypto adoption perspectives. The head of research and strategy at cryptocurrency exchange AAX, Ben Caselin, stated that although we might see custodial stablecoins being adopted in the near future, it is highly unlikely that we will be heading toward a massive crypto payments society.

“With increased integration, we can expect more vetting and regulation which will not bode well at all for crypto. There might be some venues where particular tokens may be the currency of choice, for example, a Bored Ape-themed restaurant is likely to accept payments in ApeCoin. But, other than that, I’m of the view that ultimately, real-world payments and store of value utility will converge on Bitcoin, although this does not discount the continued growth of online and offline micro-economies.”

However, he agreed that it was encouraging to see mainstream people get a better understanding of money. He noted that if merchants and corporations can actually hold the crypto assets they are paid with, this could be very exciting.

What cryptocurrency is suitable for retail payments?

Some of the top condensers for the role of retail crypto payments are Solana (SOL) and Bitcoin (BTC). Some believe that Solana (SOL) can easily accommodate everyday transactions, as it offers high speeds and low gas fees, making it more accessible. Bitcoin (BTC) is a bit more controversial, but it was already chosen as a legal tender in some countries (El Salvador and the Central African Republic), which may lead to a more mainstream approach and increase in popularity. 

Many of those already working in the crypto space believe that Bitcoin will be a more popular method of payment than any stablecoin even though most products and services are denominated using U.S. dollars. Some supporters say that Bitcoin (BTC) has proven its viability, having survived multiple crises and more than one crypto winter. Bitcoin seems to be working well for larger transactions, but can also become more viable for smaller transactions as a result of advances in solutions built on top of the Lightning Network.

However, it is unlikely that BTC-centric payments will be implemented at a mass scale over the next few years. This is due in large part to the fact production costs are still paid using fiat currencies. They are typically tied to the U.S. Dollar, Euro, British Pound, yen, or yuan.

Besides Bitcoin (BTC), Ether (ETH) could also be a strong contender for the go-to global payment crypto for retail businesses, due to its market dominance and popularity among investors. 

There is also no doubt that the most used and held cryptocurrencies will gain the most ground in the payments market. As transactional currencies, the 20 largest coins in market capital will prevail. And stablecoins will surely be part of that market. 

Mainstream and big companies are already accepting crypto payments

The popularity of crypto assets has increased rapidly, with many famous brands now accepting digital currencies. Microsoft accepts Bitcoin crypto payments for its various services, including Xbox Live, Microsoft Apps, and games.

Overstock, an American online furniture retailer, appears to be the leader in crypto shopping. The reason is that the company currently accepts a variety of digital tokens including Bitcoin, Litecoin (LTC), Ether (ETH), and Monero (XMR ). Home Depot, America’s largest hardware store chain, accepts Bitcoin payments via Flexa’s checkout system. This is a crypto payments ecosystem supported by Gemini.

Starbucks also has partnered with Bakkt futures exchange, which allows users to pay for their coffee and other digital goods using digital assets. This is also true for American supermarket chain Whole Foods. Recently partnered with SPEDN, allowing users the ability to purchase all their groceries using BTC or LTC. SPEDN does not only apply to Whole Foods. It also allows users to use their digital holdings at Jamba Juice, Jamba Juice, Regal Cinemas, and Baskin Robbins.

AT&T, the first American telecom provider, has offered its clients crypto payments. BitPay is a third-party payment portal that allows users to access the company’s services and offerings using Bitcoin.

Other than the ones listed above, there are many other notable brands that accept crypto payments. These include entertainment company AMC, travel booking agent Travala and American department store franchisee JCPenney (through gift cards). GameStop is also accepting crypto payments.

We are moving into a future in which digital currencies will continue to grow in popularity at an alarming rate. It will be fascinating to see how crypto integrates into the global retail landscape, particularly in terms of competing with or complementing existing fiat payments systems.