11 BARRIERS TO BROADER INVESTMENT IN CRYPTO

Last updated: June 19, 2025, 22:40 | Written by: Linda Xie

The cryptocurrency market, once a niche interest, has exploded into a multi-trillion dollar industry, capturing the attention of institutional investors and everyday individuals alike. The proposal seeks to broaden the criteria for who qualifies as a broker within the crypto industry. For example, DEFI exchanges, wallets, multi-sig wallets, and crypto payment processors offering functionalities like fiat-to-crypto exchanges, asset swaps, and dApp integrations could be designated brokers, obligating them to gather KYC data.We saw incredible growth and milestones, but despite the increasing interest and adoption, significant hurdles still prevent broader investment in crypto.While 2025 saw total cryptocurrency value surpass $2.5 trillion, achieving true mass adoption requires overcoming these existing challenges. A new survey by Bitwise Asset Management and ETF data provider VettaFi reveals that most financial advisors still face challenges in accessing crypto for their clients. Only 35% of advisors said they could buy crypto in client accounts, highlighting a major barrier to broader adoption. Advisors clients express interest in cryptoThis article delves into the core issues hindering widespread crypto investment, highlighting crucial areas like security concerns, regulatory uncertainty, and user experience complexities. Christina Comben from Coincentral is providing us with a list of barriers that prevent the widespread adoption of cryptocurrencies so far. I provide a summary of the reasons here. Lack of clarity.Understanding these barriers is the first step towards unlocking the full potential of digital assets and ensuring wider participation in this transformative technology.We'll explore everything from the lack of clear regulatory frameworks and the perceived risk associated with digital assets to the complexities of user experience and the gender disparity within the crypto space.By identifying and addressing these problems, we can pave the way for a more inclusive and accessible crypto future, benefiting both individual investors and the global economy.Let's explore these eleven key roadblocks to broader crypto investment and adoption.

1. Several barriers are preventing the broader adoption of cryptocurrencies. Let's take a closer look at some of the most significant obstacles. Lack of Understanding. One of the main barriers to crypto adoption is the need for more understanding of cryptocurrencies and their work.Lack of Understanding and Education

One of the most significant barriers to broader investment in crypto is the simple lack of understanding surrounding the technology. 11 barriers to broader investment in crypto cointelegraph.com 13 LikeMany potential investors are intimidated by the complex terminology, the underlying mechanics of blockchain, and the sheer volume of information available. The survey shows that the most desirable features for crypto wallets are the ability to pay for everyday items (35.96%), easier onboarding and avoiding risk of losing key (24.56%), and the ability to invest with ease at low-risk (26.32%).This lack of fundamental knowledge can lead to fear of making costly mistakes and a reluctance to enter the market.

The cryptocurrency world is filled with terms like ""blockchain,"" ""cryptographic keys,"" ""decentralized finance (DeFi),"" and ""non-fungible tokens (NFTs)."" For someone unfamiliar with these concepts, navigating the crypto landscape can feel like learning a new language.

Solution: Increased educational resources are crucial. It is also the largest placement made in digital assets and stablecoins and the single biggest investment in a crypto company to date, eclipsing the combined$1.11 billion raised by 137This includes simple, easy-to-understand guides, online courses, and educational content from trusted sources. As the barriers to crypto adoption continue to diminish, the future of cryptocurrencies looks increasingly promising. With greater education, better regulatory clarity, and innovations like stablecoins and improved security measures, the path toward mass adoption is becoming clearer.Communities where newcomers can connect, ask questions, and learn from experienced crypto users can be invaluable.
Example: Crypto platforms could offer interactive tutorials that walk users through the basics of buying, selling, and storing cryptocurrencies.

2. Findings. Our investigation unearthed seven pivotal issues, which manifest as significant barriers related to the ambivalent use of crypto for funding projects, encompassing seven important consequential elements: (1) lack of knowledge about the technology s potentialities; (2) perceptions of crypto technology s ambivalence; (3) reputation and image consequences; (4) uncertainty about theRegulatory Uncertainty and Lack of Clarity

The regulatory landscape for cryptocurrencies remains unclear in many jurisdictions, creating uncertainty and hesitancy among potential investors. Each plan is capital returns, catering to various investment levels, from entry-level to high-value contracts. This flexibility ensures that ZT Mining can serve a broad spectrum of investors, fromThe absence of clear rules and regulations makes it difficult for institutional investors, in particular, to allocate capital to crypto assets with confidence.

Different countries have adopted vastly different approaches to regulating crypto, ranging from outright bans to relatively permissive frameworks. The biggest barrier for newcomers to the crypto space is user experience and education. The key to making crypto more accessible is to create communities where people can connect and growThis inconsistency creates compliance challenges for businesses operating in the crypto space and makes it difficult for investors to assess the legal risks associated with crypto investments.

Solution: Clear and consistent regulatory frameworks are needed to provide legal certainty and encourage responsible innovation in the crypto industry.This includes defining the legal status of cryptocurrencies, establishing rules for crypto exchanges and custody providers, and addressing issues such as taxation and anti-money laundering (AML) compliance.
Example: A standardized approach to crypto taxation across different jurisdictions would simplify compliance and reduce the risk of tax-related penalties for investors.

3. Participation in cryptocurrency investing, buying, trading, selling, and using crypto products may be subject to legal restrictions in your country and is subject to age restrictions (18, 19, or 21, depending on the jurisdiction).Security Concerns and Perceived Risk

Security concerns are a major deterrent for many potential crypto investors. Cofounder CEO of Fluree Brian Platz shares thoughts on barriers to crypto adoption for Cointelegraph's panel of experts:Stories of hacks, scams, and lost funds are common in the crypto space, creating a perception of high risk.The decentralized nature of crypto can make it difficult to recover stolen funds, which further exacerbates these concerns.

Incidents such as exchange hacks, phishing attacks, and ransomware scams can result in significant financial losses for crypto investors. Despite the rapid rise of the cryptocurrency and blockchain industry, women remain significantly underrepresented. This article examines the gender gap in crypto, exploring key challengesThe lack of robust security measures and consumer protection in some crypto platforms contributes to these risks.

Improving Crypto Security

Robust Cybersecurity: Stronger cybersecurity protocols, including multi-factor authentication, encryption, and cold storage solutions.
Insurance: Asset protection through insurance for digital assets held by exchanges and custody providers.
Transaction Monitoring: Advanced transaction monitoring systems to detect and prevent fraudulent activities.
Hardware Wallets: Promoting the use of hardware wallets for secure storage of private keys.

4. Consumers have identified asset protection through insurance and robust cybersecurity as top priorities for increasing their confidence in cryptocurrencies. These measures, along with transaction monitoring and advanced hardware wallets, play a crucial role in mitigating security risks.User Experience (UX) and Onboarding Difficulties

The user experience in the crypto world can be complex and confusing, particularly for newcomers.Setting up a crypto wallet, understanding private keys, and navigating decentralized exchanges can be daunting for those unfamiliar with the technology.

Many crypto platforms have clunky interfaces, confusing terminology, and lack user-friendly features.This can make it difficult for beginners to get started with crypto investing and discourage them from further participation.

Solution: Improving the user experience is crucial for making crypto more accessible. Top cryptocurrency prices and charts, listed by market capitalization. Free access to current and historic data for Bitcoin and thousands of altcoins.This includes simplifying the onboarding process, designing intuitive interfaces, and providing clear and concise instructions.
Example: Crypto wallets could offer simpler onboarding processes and remove the risk of losing keys by integrating multi-factor authentication and account recovery options.

5.Scalability Issues and Transaction Costs

Some cryptocurrencies, such as Bitcoin, have faced scalability issues, resulting in slow transaction times and high transaction fees during periods of high network congestion.These scalability challenges can limit the usability of cryptocurrencies for everyday transactions.

High transaction fees can make it uneconomical to use cryptocurrencies for small purchases, hindering their adoption as a mainstream payment method.

Solution: Ongoing efforts to improve the scalability of blockchain networks are essential.This includes implementing technologies such as layer-2 scaling solutions and sharding to increase transaction throughput and reduce fees.
Example: The Lightning Network, a layer-2 scaling solution for Bitcoin, enables faster and cheaper transactions by processing payments off-chain.

6.Price Volatility

The extreme price volatility of many cryptocurrencies is a major concern for potential investors. How minority-led firms navigate financial landscapes. Black-owned investment companies face a distinctive set of challenges within an industry where less than 1.5% of assets under management areThe value of crypto assets can fluctuate wildly in short periods, leading to significant gains or losses.

This volatility can make it difficult for businesses to accept cryptocurrencies as payment, as the value of the cryptocurrency could change significantly between the time of the transaction and the time it is converted into fiat currency.

Solution: Stablecoins, which are cryptocurrencies pegged to a stable asset such as the US dollar, can help to mitigate price volatility. 2025 was an incredible year for investing in crypto and for cryptocurrency investors. We saw the total value in cryptocurrencies surpass the $2.5 trillion level in May 2025, and adoption rates for cryptocurrencies are skyrocketing, not just on Wall Street, but also among the average investor.These stablecoins can be used for payments and trading without the risk of significant price fluctuations.
Example: Stablecoins like USDT and USDC are widely used in the crypto ecosystem for trading, lending, and other financial activities.

7.Environmental Concerns

The energy-intensive nature of some cryptocurrency mining processes, particularly Proof-of-Work (PoW) mining, has raised concerns about the environmental impact of crypto.

The high electricity consumption of PoW mining operations contributes to carbon emissions and can strain local power grids.

Solution: Transitioning to more energy-efficient consensus mechanisms, such as Proof-of-Stake (PoS), can significantly reduce the environmental impact of crypto.
Example: Ethereum's transition to Proof-of-Stake (the ""Merge"") reduced its energy consumption by over 99%.

8.Lack of Institutional Adoption

While institutional interest in crypto has grown in recent years, adoption by mainstream financial institutions is still limited.Many institutions are hesitant to invest in crypto due to regulatory uncertainty, security concerns, and a lack of established infrastructure.

The limited availability of crypto investment products, such as exchange-traded funds (ETFs), also hinders institutional adoption.

Solution: The approval of spot Bitcoin ETFs, for example, has opened the door for more institutional investment in crypto.Continued development of robust custody solutions and regulatory frameworks will further encourage institutional adoption.
Example: Financial advisors indicating their clients' interest in crypto, yet only 35% can currently buy crypto for them, indicates a substantial untapped market waiting for easier access solutions.

9.Gender Disparity in Crypto

Women are significantly underrepresented in the cryptocurrency and blockchain industry.This gender gap may be due to a variety of factors, including lack of access to education and resources, societal biases, and a perceived lack of inclusivity in the crypto community.

The underrepresentation of women in crypto not only limits diversity but also may hinder the development of crypto products and services that appeal to a broader audience.

Solution: Efforts to promote greater inclusivity and diversity in the crypto space are needed.This includes providing educational opportunities and mentorship programs for women, as well as creating more welcoming and inclusive communities.
Example: Creating communities and resources specifically targeted to women interested in learning about crypto can help bridge the gender gap.

10.Centralization Concerns

Despite the promise of decentralization, some areas of the crypto industry have become increasingly centralized.For example, a small number of exchanges and mining pools control a large share of the market.

Centralization can undermine the principles of decentralization, transparency, and censorship resistance that are central to the crypto ethos.

Solution: Encouraging greater decentralization in key areas of the crypto ecosystem is crucial.This includes promoting the development of decentralized exchanges (DEXs), supporting diverse mining pools, and fostering a more distributed governance model.
Example: DeFi exchanges offer an alternative to centralized exchanges, allowing users to trade cryptocurrencies directly with each other without intermediaries.

11.Proposed Regulatory Overreach

While regulatory clarity is crucial, some proposed regulations may be overly broad or burdensome, potentially stifling innovation and hindering the growth of the crypto industry.

For example, proposals that would require DeFi exchanges and wallet providers to collect KYC data on all users could create significant compliance challenges and undermine the privacy of crypto users.

Solution: A balanced approach to regulation is needed, one that protects consumers and prevents illicit activities without stifling innovation.This requires careful consideration of the potential impact of regulations on the crypto industry and engagement with stakeholders to develop proportionate and effective rules.
Example: The proposal seeking to broaden the criteria for who qualifies as a broker within the crypto industry could inadvertently capture decentralized protocols, creating unnecessary compliance burdens.

Overcoming the Barriers: A Path Forward

Addressing these eleven barriers is essential for unlocking the full potential of cryptocurrencies and fostering broader investment and adoption.By increasing education, clarifying regulations, improving security, enhancing user experience, addressing scalability concerns, mitigating price volatility, reducing environmental impact, promoting institutional adoption, fostering greater inclusivity, addressing centralization concerns, and avoiding regulatory overreach, the crypto industry can create a more accessible, secure, and sustainable ecosystem for investors and users alike.

Conclusion: The Future of Crypto Investment

The path to wider crypto adoption is not without its obstacles, but by understanding and addressing these 11 barriers to broader investment in crypto, we can create a more inclusive and robust financial landscape.From simplifying the user experience and increasing educational resources to establishing clear regulatory frameworks and enhancing security measures, each step we take brings us closer to realizing the full potential of digital assets.As the barriers to crypto adoption continue to diminish, the future of cryptocurrencies looks increasingly promising.With greater education, better regulatory clarity, and innovations, the path toward mass adoption is becoming clearer.The journey toward mass adoption requires continuous effort, collaboration, and innovation.Embracing these challenges and working together to overcome them will pave the way for a future where cryptocurrencies play a significant role in the global economy.