Cryptocurrencies have quite a reputation, with some people being in love with this technology and some hating it to the very core. But let’s put all those emotions aside for a minute and apply some scientific thinking here. Our expert, Sophia Shluger, made a SWOT analysis of crypto for us – so let’s have a look!
What is a SWOT analysis?
You’re probably familiar with the SWOT analysis technique, but just to make sure we’re on the same page, let us explain what it is real quick.
SWOT analysis refers to the management technique, which aims to help companies and individuals identify their internal strengths and opportunities, as well as external threats and weaknesses. Sounds insightful, doesn’t it?
SWOT analysis of Crypto
Now that we know what SWOT analysis is, let’s dive straight into the business and have a look at this analysis of crypto prepared by our amazing expert, Sophia.
- Strengths: The greatest strengths of cryptocurrencies are the unique properties underlying the blockchain technology. Needing no permissions or trust, Blockchain offers transparency and removes the no-value-adding intermediaries out of the picture, together with their fee-charging business models.
- Weaknesses: Two of the most concerning aspects associated with crypto are scalability and digital identity. There are obviously limitations to the number of transactions per second that can be facilitated by different protocols at once, which is why scaling up is quite tricky. When it comes to privacy, there is a lot of room for improvement, which again goes down to the need for appropriate regulations in that digital space.
- Opportunities: One of the biggest opportunities in crypto is the growing institutional adoption. There are a number of new wallets generated, the liquidity in the market is increasing over time and we see an increasing possibility of allocating funds, including pension funds, into crypto, e.g. Bitcoin.
- Threats: Crypto requires having the right regulations and business models for risk management in place. The co-existence of digital assets, such as CBDCs and cryptocurrencies is as exciting as it is demanding. The regulations by themselves are not a threat – but they do create a barrier for new entrants into the crypto market.
57% of crypto mining is running on renewable energy.
As insightful and essential to understanding the landscape of crypto the SWOT analysis is, we’re just scratching the surface of the vast world of digital assets here. Since we left our emotions outside the room for now, why not use this opportunity to check out the rest of our guide around crypto? Join our expert, Sophia Shluger, and start discovering now!