Crypto has been hitting the headlines again in 2023 and there is much speculation surrounding the digital currency. Those who have invested in crypto will be hoping 2023 is a great year but is crypto set for a strong 2023 after a mediocre 2022?
What Went Wrong in 2022?
It is worth noting the economy struggled during much of 2022 due to external forces out of the control of most people. The aftereffects of the pandemic were lingering, the start of conflict in Ukraine, and the increase in inflation saw global growth decline in 2022 from the previous year. There were additional factors that had a negative influence on crypto, including the FTX bankruptcy and Terra stablecoin (UST) collapse. All of these lowered confidence in the crypto sector and saw some people deciding to sell their crypto assets. However, there was some good news to come out of 2022, including The Merge. Ethereum’s Merge in September means Ethereum’s energy consumption has dropped significantly and that has led to more confidence in the cryptocurrency.
Why Crypto Could Bounce Back in 2023
If we take the first few weeks of 2023 as an indication of what to expect for the remainder of the year, things are looking up when compared to 2022. In the first two weeks of 2023, the crypto market enjoyed a 6.5% increase and that is a great sign the market has turned its back on last year and is going to enjoy a strong 2023. Inflation is beginning to ease in many countries around the world and there have been improvements in employment figures. Bond yields are also worth following as an indicator of the how interest rates will change and things look positive, which is good news for investors. It is worth noting many of the factors that influenced the decline of the crypto market in 2022 have not simply disappeared but the signs are that things are beginning to improve for the worldwide economy.
The Continued Acceptance of Crypto
The more brands that start accepting crypto as a payment method, the more likely the market is going to improve in 2023. We have seen some of the biggest brand names in the world accept cryptocurrency in recent years, including Microsoft, Ryde, Overstock, Etsy, Shopify, and AT&T. However, one of the biggest online industries to introduce crypto payments is online gambling. It is possible to play live casino games, with a real dealer using crypto as a deposit method. Many established online casinos have introduced crypto as a payment method and we have seen the introduction of crypto casinos. These have been created specifically for those who want to gamble online using cryptocurrency and have become very popular. The more brands that accept crypto, the more positive people will feel about the future of the currency, and the market will become stronger as a result.
Read also: What Crypto to Buy Now: The Ultimate Guide to Investing in Cryptocurrency.
There is some way to go before the crypto market returns to how it was before the disappointment of 2022 but the signs in early 2023 are good.
FAQs about Investment in Crypto
Crypto is a general term used to describe digital assets, such as cryptocurrencies, that use cryptography to secure and verify transactions. Cryptocurrencies are decentralized, meaning they don’t rely on traditional banking institutions or governments. This makes them attractive to those seeking a more secure and potentially more profitable way to invest.
The advantages of investing in Crypto include potential for high returns, low transaction fees, wide availability, and increased liquidity. Cryptocurrencies have seen increased adoption in recent years, meaning more people are investing, which has led to more exchanges and higher liquidity. This means more opportunities for investors to buy, sell, and trade their chosen cryptocurrency.
The risks of investing in Crypto include high volatility, liquidity risk, regulatory risk, and security risk. Cryptocurrencies are highly volatile, meaning their value can fluctuate wildly. This makes it difficult for investors to time their investments, as the market can turn on a dime. Additionally, exchanges are vulnerable to hacks, meaning any funds stored on them could be lost. Lastly, the regulatory landscape for Crypto is still developing, meaning regulations can change quickly and without warning.
To buy Crypto, you need to set up a Crypto wallet, which is a software application that stores your funds. You then need to buy your preferred cryptocurrency using a traditional payment method. Once you own a cryptocurrency, you can transfer it to your wallet and store it there. You can then buy, sell, and trade Crypto on a Cryptocurrency exchange.
