Without a doubt, 2022 has been a difficult year for several cryptocurrency firms and investors.
The crypto industry is facing a significant challenge. The value of the cryptocurrency market capitalization has fallen dramatically; it was worth around $3 trillion at its peak in November 2021 and is now worth $810 billion at the time of writing.
However, what goes down must come back up; thus, reviewing the current crypto market and its potential future could be an excellent way to see what the cryptocurrency industry might look like in 2023. Is it possible that the crypto industry will see a significant turnaround in 2023? Let’s find out and discuss everything in this article.
When Will the Crypto Winter End?
In January 2022, Ether (ETH) was worth more than $3,800, and Bitcoin (BTC) was worth nearly $48,000—then prices plummeted, and the crypto market crashed. However, this is not surprising given that the crypto market has its own boom and bust cycles, and all investors hope that crypto winter will end soon.
In the past, cryptocurrency has experienced ups and downs. A quick examination of Bitcoin’s price history, the industry’s benchmark, will reveal how the market has behaved in previous years and any patterns that may repeat.
- In 2018, Bitcoin rose to around $20,000, then dropped 84% to $3,000
- In November 2020, Bitcoin recovered and surged to nearly $17,000
- In May 2021, Bitcoin was around $37,000 before rebounding to all-time highs of almost $69,000 later that year.
- On November 9, 2022, Bitcoin fell to $15,000 before quickly recovering to $17,000 the next day.
It shows that Bitcoin always recovers and that history frequently repeats itself. A crypto winter will end when inflation begins to fall, the energy crisis begins to resolve, and all countries are at peace, given current market conditions, macroeconomic factors, and all variables. Nobody can truly predict the future, but once the market has corrected, investors will start investing more, and the more demand there is, the higher the price.
Is It Worth Buying Cryptocurrency Now?
Bitcoin has now proven to be an actual use case as digital payments and Blockchain have changed the world. The more people with access to Blockchain and cryptocurrency knowledge, the more adoption will occur.
But the cryptocurrency market is highly volatile, and some coins can lose or gain value within hours. Investing in cryptocurrencies now could provide opportunities, as many coins have tremendous growth potential.
The token prices of the most promising projects are at their lowest during a bear market, allowing you to begin investing in cryptocurrencies with little money. Furthermore, technology-driven projects such as metaverse, Web3, and NFT will enable you to be early investors. However, it is best to study each asset before investing and not always invest more than you can afford to lose.
Cryptocurrency and Metaverse
Bitcoin, the first cryptocurrency, has already demonstrated that it can be used in both the real and virtual worlds. While the metaverse is a separate concept from cryptocurrency, cryptocurrency and the metaverse share one important feature: they are built on the Blockchain and can coexist happily. The two concepts have a clear potential synergy.
The web experience is currently undergoing the most significant transition, progressing from web 1 to web 2 and now to web 3, and the metaverse enhances more exciting experiences. People nowadays enter the metaverse and purchase virtual land with metaverse crypto coins. People are still determining what the metaverse will eventually take. But undoubtedly, it has the potential to impact how cryptocurrency evolves significantly.
Cryptocurrency and NFTs
Non-fungible tokens, or NFTs, have been around since 2014, and this technology will enter the mainstream in 2021. NFTs represent digital ownership of a wide range of unique intangible items, attracting the attention of celebrities and consumer brands ranging from Nike to Gucci.
Brands are adapting their marketing to stay relevant to modern technology by providing customers with non-fungible digital tokens (NFTs).
NFTs are stored using blockchain technology, which aids in recording digital asset ownership, and brands use NFTs to build brand loyalty, community, and relationships with their customers.
Cryptocurrency and DeFi
Blockchain technology, like DeFi, is still in its early stages, but it has the potential to transform traditional financial instruments.
Consumers are looking for alternative financing options, and currently, there are many new DeFi applications available for consumers to choose from.
With DeFi, consumers can transfer funds, invest in commodities, or secure loans with a single click.
Back in 2021, a CNBC article included Mark Cuban’s comment on DeFi in an interesting comparison of traditional banking and DeFi.
“Some industries are change adverse. It’s the innovator’s dilemma. Banks could have simplified/automated to the point that DeFi wasn’t needed. They didn’t. They are so stuck in legacy [operations] they are disrupted by simple fintech,” Mark Cuban.
Looking ahead, we’ll have to see how DeFi interacts with the regulations and whether DeFi applications can truly use cryptocurrency to recreate traditional financial systems.
DeFi is still in the wildest stage, and consumers should exercise extreme caution before using any DeFi platform because it is unregulated and could have a negative impact on users if the platform turns out to be a fraud.
Cryptocurrency Vs. Cash
As we move forward into the cashless society, the use of cash begins to fade, and Digital assets are now used to pay for services.
Ether is known as digital cash, whereas Bitcoin is known as digital gold, which means it can be exchanged for anything and has become essential to our daily lives. A 2020 survey by HSB reveals that 36% of small-medium businesses in the US accept Bitcoin. Today, the most popular companies accepting Bitcoin payments worldwide are as follows:
- Whole Foods
- Etsy, Inc
- Virgin Group
- Norwegian Air
The list continues to grow, indicating that today’s businesses recognize the value of the digital currency and are willing to accept it and that reflects that the cryptocurrency adaptation has become more prominent and more substantial for years to come.
Beyond any doubt, more new projects will emerge in 2023, along with more guidelines and regulations. The market may slow before resuming its upward trend, and the rate of new project development may suffer as a result of heavy regulations. Still, Blockchain and cryptocurrencies are here to stay.
More adoption and the cryptocurrency market cap could significantly increase in value, depending on the economy and how much investors believe in the potential growth of the crypto industry. And before investing, make sure you understand the risks and remember to invest only what you can lose and diversify your investment portfolio to balance the risk.
The opinion expressed here is not investment advice – it is provided for informational purposes only. Every investment and all trading involves risk, so you should always research before making decisions. We do not recommend investing money you cannot afford to lose.