Bitcoin was worth around $450 billion at the end of February 2023.
While this is a steady increase over the last six months, it’s important to note that the entire crypto market is still down. In 2021, Bitcoin managed to become the fastest asset to reach $1 trillion. However, external economic factors such as the pandemic, inflation, and instability in Europe crashed markets around the world.
This bear market has been going on for a while now, but investors are starting to consider crypto again in 2023. The economy is regaining some stability investors are eagerly looking to diversify their portfolios with alternative assets. This is why it’s a great time to take a closer look at the crypto market and what it has in store for 2023.
Want to learn more about the crypto market? Read on for a complete guide on the current state of the crypto market and what you can expect in 2023.
If you’re new to the world of crypto, it’s important to start with the basics. Cryptocurrency is a digital currency that’s designed to be a medium of exchange. This currency is completely digital and relies on a secure computer network to operate.
The network that underpins crypto is called the blockchain. In many ways, the blockchain is what gives crypto its value. This is because blockchain technology is incredibly secure and reliable.
Many experts agree that blockchain technology is more secure than what most banks use to keep track of your money. In this way, crypto is often referred to as the most secure way to hold and transfer money. Since everything is digital and decentralized, you can send millions of dollars across the world in split seconds.
The crypto market dates back over a decade. However, the early adoption rates were incredibly low. This saw the price of popular tokens like Bitcoin stay under $500 for a few years.
Everything changed in 2017 when Bitcoin made headlines around the world. The technology became incredibly popular, and Bitcoin skyrocketed in value to a high of around $19,500. The price did cool off but still remained around $3,000 to $10,000.
While 2020 was a terrible year for the financial markets, it had the opposite effect on the crypto market. The entire crypto market grew at unprecedented rates in both 2020 and 2021. Bitcoin managed to reach an all-time high of $61,000 in March 2021.
Bitcoin receded for the rest of the year before rebounding to set another all-time high at over $64,000 in November 2021. While the entire crypto market was up, it was not immune to the general economy. Inflation, economic hardship, and the political instability of Europe caused the financial market to crumble around the world.
This saw major institutional investors pull out of their crypto positions. The instability of the market caused Bitcoin to fall below $17,000 by November 2022. While this does highlight the risk of investing in crypto, it also showcases the massive upside potential.
This is because you can buy Bitcoin for a fraction of what it was worth a few years ago. The same coin that was worth $64,000 a few years ago can be yours for a third of the price. This showcases the potential of the crypto market going forward.
When it comes to the world of crypto, there are a few popular coins that you should know about. These coins are based on their own technologies, making them unique to the market. Here’s a quick look at the most popular cryptocurrencies that you can invest in today.
It’s no secret that global markets have taken a massive hit over the last few years. The pandemic caused economies around the world to shut down overnight. This impacted industries and financial markets in 2020 but continues to have an impact today.
Here’s a quick look at the current market conditions and how they’ve impacted the crypto space.
It’s no secret that the pandemic in 2020 devastated markets around the world. Many large companies had to fire thousands of workers, while others closed down completely. Crypto managed to skyrocket early on, but inflation and other post-pandemic effects quickly caught up.
This saw the crypto market shrink from over $3 trillion to under $1 trillion in just one year.
Inflation is a major reason why crypto has been stagnant over the last year. The price of everyday items like food, clothes, and gas have added pressure on consumers and retail investors. This means that people don’t have the extra money to invest like they used to.
You can’t talk about crypto without mentioning the hundreds of crypto scams that have been on the news. The latest scams include multi-billion dollar crypto exchanges that have quickly gone bust. This caused retail investors to lose billions of dollars overnight.
The fear of future scams is preventing people from investing in crypto today.
While the economy has recovered from the pandemic, the war in Ukraine sent everything into a whirlwind again. This saw the price of gas skyrocket and inflation take off again. 2023 does seem like a better year for the global economy, but investors are still operating with skepticism.
While the crypto market has taken a beating over the last few years, there’s light at the end of the tunnel. This is because there are major benefits that come with investing in cryptocurrencies. To help you understand why investors will turn back to crypto, here’s a quick look at these undeniable benefits.
Investing in crypto is a great way to diversify your portfolio. This is because crypto is an alternative asset that’s not directly linked to a central authority. In this way, your investment can grow independently of how your other investments are doing.
This makes it one of the most effective hedges that you could include in your investment portfolio.
As mentioned above, there’s massive upside potential when it comes to crypto. Even if crypto doesn’t go beyond its previous highs, you can still triple your money. This makes it one of the best returns that you could possibly ask for.
While the buying pressure is what gives crypto its price, the underlying technology is what gives it value. If you take a closer look at this technology, you’ll notice that it’s only gotten better over the years. This means that crypto is more efficient and valuable than ever before.
Blockchain technology has evolved over the years, but nothing as impressive as what Ethereum managed to do. Ethereum managed to cut its entire energy consumption down by 99%. This is a clear indication of what’s possible in the future of crypto.
As mentioned above, Ethereum managed to slash energy consumption by over 99%. This was possible due to the ‘proof of stake’ model replacing the ‘proof of work’ model of the past. In simple terms, computers and networks are not fighting over hosting part of the network.
Instead, a lottery is conducted to choose computers that have proved their capabilities in the past. This reduces the number of computers and servers needed for the network to remain connected and secure.
The general economy has stabilized over the last few months. While there are parts of the global economy that are still volatile, the general atmosphere is stable. This means that investors don’t have to invest with as much caution as they did in the past.
Despite the fact that institutional investors have not yet returned to the space, we could see them flock back soon. This is why it’s important to buy in before they do to secure the best price.
The current market conditions are not ideal. However, they are ideal for investors that want to get in early on the next crypto boom. In simple terms, you can buy popular cryptos like Bitcoin and Ethereum for a fraction of their 2021 value.
This makes it a great investment opportunity for those who want to go all-in on the crypto market. The lower prices just mean that you can afford even more exposure to the upsides of the market. To make things even better, the new technologies around crypto make it more valuable than ever before.
The general economy is recovering, and investors will look at crypto again in the near future. At the end of the day, crypto is one of the best alternative assets that you can invest in. While it’s never a good idea to put all your eggs in one basket, investing a small portion of your portfolio in crypto is a great way to hedge your bets.
This is the best solution as you won’t lose as much if crypto continues to go down. However, you can win big if crypto has a rebound. Even if crypto were to go back to its high in November 2021, you would triple your money.
If you invest $1,000 in crypto today, a rebound back to its high would see your investment become worth $3,000. This makes the upside potential definitely worth the risk.
It’s no secret that we’re still in the middle of a crypto bear market. Prices have been shaky for the last year and investors are rightful scared to invest in the market. However, it’s important to understand that crypto has not lost its technical edge in the financial market.
The underlying technology has not gone away. Instead, there have been major strides forward that provide crypto with more value than ever before. This is why many investors agree that crypto is bound to rebound this year and could even exceed its previous highs.
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