The value of all cryptocurrency transactions will fall sharply this year to just over $30 billion, compared with $71 billion in 2014, a new report from Juniper Research has predicted.

The analysis noted that this decline was attributable to the combined impact of exchange collapses, Bitcoin theft, and regulatory concerns around the role of cryptocurrency in funding dark web purchases.

However, the report also argued that the introduction of licensed, regulated exchanges could lead to a stabilisation in currency values, and with it an increase in retail transaction adoption. It pointed out that in an unregulated market place, consumer confidence had been eroded by the demise of the Mt Gox exchange in February 2014, and the recent theft of nearly 19,000 Bitcoins from BitStamp hot wallets.

Although companies such as PayPal have started to allow US consumers to purchase digital goods via Bitcoin, Juniper noted: “The scale of the challenge facing Bitcoin is so great that it will struggle to gain traction beyond a tech-savvy and/or libertarian demographic.”

Instead, the research identified a longer term role for cryptocurrency protocols in the wider payments space. Report author, Dr Windsor Holden, explained: “It is likely that we will see the technologies behind cryptocurrency deployed in areas such as real-time transactional settlement. Ripple Labs is already focusing overwhelming on that approach, and in the medium term we may see a role evolution to this end amongst other cryptocurrency players.”

Share Story: