As the financial landscape evolves, cryptocurrency has emerged as one of the most promising investment opportunities. With its decentralized nature and potential for high returns, cryptocurrency has attracted the attention of investors worldwide. In this blog, we will explore five compelling reasons why cryptocurrency stands out as the best investment opportunity of 2023.
If you’re nervous about the market right now, you’re not alone. But should you keep investing? There are three reasons to stick with crypto in 2023, and one reason you’re better off avoiding it for now.
Why now could be a smart buying opportunity
1. Prices are at rock bottom
At its peak, Bitcoin cost nearly $70,000 per token, and Ethereum was priced at close to $5,000 per token. Today, Bitcoin stands at just under $27,000, with Ethereum at roughly $1,500.
If you’ve been looking for a more affordable time to invest in crypto, you may not get a better chance than right now. The crypto market is essentially on clearance at the moment, and it’s possible to load up on quality investments for a fraction of the price.
2. The upswing could be lucrative
Of course, nobody knows for certain whether the crypto market will recover. However, downturns like this aren’t necessarily uncommon in this industry, and major cryptocurrencies have faced worse in the past.
For example, back in 2018, Ethereum’s price fell by nearly 95% over the course of the year. If you had invested at its lowest point, you would have seen returns of nearly 4,500% over the following three years alone.
Again, it’s unclear what the future holds for crypto, and we may not see another rally similar to the 2020-2021 surge. But even if cryptocurrencies don’t reach their all-time highs again anytime soon, even a relatively small upswing could still be lucrative if you invest at rock-bottom prices.
3. You might regret not investing
Crypto is a speculative investment, so nobody — even the experts — knows how it will fare over the long term. While it could fail, it could also change the world.
When you’re deciding whether to invest, consider which of these options you’d regret more: investing now and losing money if crypto fails, or not investing and missing out on the investment of a lifetime if crypto succeeds.
To be clear, this doesn’t mean you should go all-in and invest every dollar you have in crypto. As with any investment, it’s important to buy wisely and only invest what you can afford. But for some people, it’s worth risking a little money to avoid the regret of not taking this chance.
REASONS TO INVEST IN CRYPTO
Potential for Explosive Growth:
Cryptocurrencies have demonstrated remarkable growth potential over the past decade. While there have been periods of volatility, the overall trajectory has been upward. The emergence of decentralized finance (DeFi), non-fungible tokens (NFTs), and innovative blockchain projects continues to drive the expansion of the crypto market. With increasing mainstream adoption and institutional interest, the potential for explosive growth in 2023 and beyond is substantial.
Bitcoin Price is at a current level of 26333.09, down from 26501.04 yesterday and up from 19047.42 one year ago. This is a change of -0.63% from yesterday and 38.25% from one year ago.
You can see the growth of BTC in last one year 19th June, 2022 to 19th June 2023
for more information and examples you can visit our last blog >> CLICK ME
Diversification and Hedging Opportunities: Cryptocurrency provides an excellent avenue for diversifying investment portfolios. Traditional investment options, such as stocks and bonds, may be subject to similar market conditions. However, cryptocurrencies have a unique market dynamic and are influenced by different factors, offering a hedge against traditional assets. By allocating a portion of your investment portfolio to cryptocurrencies, you can reduce overall risk and potentially increase returns through diversification.
Bitcoin prices have risen post 2017, and there has been a phenomenal increase in prices of bitcoin during 2020, i.e., the COVID-19 period. Bitcoin prices have risen post 2017, and there has been a phenomenal increase in prices of bitcoin during 2020, i.e., the COVID-19 period.
This property of bitcoin seems similar to its counterpart gold, which, despite its potential safe haven properties, has been found to be riskier than stocks and bonds (D. G. Baur & Lucey, Citation2010)
Performance of bitcoin versus selected asset classes.
1. bitcoin vs stock market indices.
2. Bitcoin vs Bonds Market Indices.
3. Bitcoin vs Currencies.
4. Bitcoin vs Real Estate
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Innovation and Technological Advancements:
Blockchain technology, the backbone of cryptocurrencies, has the potential to revolutionize various industries. As blockchain technology matures, we can expect more real-world applications and advancements. Cryptocurrencies represent an opportunity to invest in projects that are at the forefront of technological innovation. From decentralized finance platforms to blockchain-based supply chain solutions, these investments offer exposure to disruptive technologies that can shape the future.
you can see in future’s smart transfer networks
or the blockchain network it is necessary to go through a consensus state
to modify the data. This consensus would have to validate the modification,
and it will be checked automatically over an established period of time. In
Order to broadcasts corrupt or alter any unit of information in the blockchain
system, it would be necessary a great power of computation, power that does
not exist yet and cannot be generated with the current technological level.
Progress towards decentralization and a distributed future
To use the blockchain application, we need a series of elements that work
in an integrated way to ensure and validate the data of the chain. Among
these elements we have the following:
1) Blocks: the blocks are formed as well as the links of a chain, and these
include data, modifications and confirmed transactions (figure 4).
There is a generatrix block which initiates the chain. All the blocks are
composed of an alphanumeric code that serves as a link to the previous
block (with the exception of the generatrix block) and a closing block
that links it to the next block.
2) Miners: they are the ones that process the information and it is necessary of a computer of computers, chips and integrated systems whose
computational power allows to generate and to verify the transactions carried out.
3) Nodes: it is a series of computers or chips called nodes that serve to
store and distribute the information in real time and ensure the integration of the whole system.
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Global Accessibility and Financial Inclusion:
One of the most significant advantages of cryptocurrencies is their global accessibility. Traditional financial systems often exclude millions of individuals from participating due to various barriers, such as geographical limitations, lack of infrastructure, and high transaction fees. Cryptocurrencies, on the other hand, enable borderless transactions, empower the unbanked, and provide access to financial services for underserved populations. By investing in cryptocurrencies, you can contribute to global financial inclusion while potentially benefiting from the increasing adoption worldwide.
As of today, account ownership is universal in high-income economies, as 94 percent of adults hold an account; whereas in low and middle-income economies, this share is 63 percent. In 2017, The World Bank estimated that 1.7 billion individuals do not hold an account within a financial institution4. This segment of the population is referred to as the unbanked.
The unbanked survive on less than two dollars per day and are mostly located in Africa, Asia, Latin America, and the Middle East. Not all who are considered as banked are equal. Alongside the unbanked, it is important to highlight the underbanked. This segment has limited or non-transactional access to financial services. The underbanked use money orders, check cashing services, payday loans, and other instruments offered through semi-formal or informal providers rather than traditional financial institutions or credit unions. Together these two segments account for 3.5 billion financially excluded individuals worldwide. The worrying landscape of financial inclusion is not limited to individuals only. Indeed, according to the International Finance Corporation, globally more than 200 million small and medium enterprises (MSMEs) in developing countries find it hard to access the traditional banking system.
MSMEs are crucial to economic growth and future development in emerging markets, as they contribute almost 50 percent of total employment and up to 33 percent of GDP7. Precisely, more than 40 percent of developing countries’ MSMEs have encountered several obstacles and burdens in accessing a financial account. When governments and industry stakeholders are unable to provide inclusive financial systems, the world’s poorest rely on their limited savings in cash, which is unsafe and difficult to manage. Non-inclusive financial systems contribute to alarming income inequalities and slower economic growth.
KEY CHANGES IN BLOCKCHAIN INFRASTRUCTURE
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Increasing Institutional Adoption:
Institutional adoption of cryptocurrencies has gained significant momentum in recent years. Renowned companies, financial institutions, and even governments have recognized the potential of cryptocurrencies and are integrating them into their operations. Major payment processors and corporations now accept cryptocurrencies as a valid form of payment, signaling a shift toward mainstream acceptance. Institutional investments bring stability and credibility to the crypto market, creating a favorable environment for investors. As more institutions embrace cryptocurrencies in 2023, the market is poised for further growth.
U.S. Cryptocurrency Market Report Highlights
- The software segment is expected to grow at the fastest CAGR over the forecast period, due to the increasing demand for software designed for the exchange and mining of cryptocurrencies. Moreover, increased demand for efficient and user-friendly software to manage and trade cryptocurrencies is also fueling the segment’s growth
- The graphics processing unit segment is expected to grow at the fastest CAGR due to its ability to handle complex mathematical calculations required for cryptocurrency mining with higher efficiency compared to traditional central processing units
- The exchange software segment dominated the market in 2022. The popularity of cryptocurrencies draws more people to look for a convenient and secure way to trade digital assets. This has led to the creation of numerous cryptocurrency exchanges, which require reliable and efficient exchange software to function
- The mining segment dominated the market in 2022 due to the high profitability associated with mining which has attracted several individual miners and mining companies to invest in the hardware and software required for the mining process
- The Ethereum segment is expected to grow at a significant CAGR over the forecast period. The major factor contributing to the growth is the increasing demand for Non-fungible Tokens (NFTs), which are digital assets that are unique and cannot be replicated. Ethereum’s ability to support NFTs has led to a surge in popularity and interest in the cryptocurrency, with many investors and collectors buying and selling NFTs using Ethereum
- The retail & e-commerce segment dominated the market in 2022. The increasing acceptance of cryptocurrencies as a legitimate payment method by several online platforms, coupled with the growing popularity of e-commerce is driving the growth of the segment.
Growing regulatory clarity in the blockchain & cryptoasset industry will continue to provide support for institutional adoption. Since March 2021, Canada has marked several milestones including the successful launches of cryptocurrency ETFs and increased retail access to cryptocurrencies and related financial products. Further, the New Self-Regulatory Organization of Canada and Canadian Securities Administrators have clarified the applicability of regulatory requirements for cryptoasset trading platforms.
The Financial Accounting Standards Board has also announced new guidance on accounting practices for cryptoassets. Moreover, the industry has also seen regulators take action, with the Office of Foreign Assets Control announcing sanctions against Tornado Cash, a cryptocurrency mixer allegedly used to launder crime proceeds. Over the past few years, traditional institutions and corporations have increased their presence in the cryptoasset ecosystem. Several institutional firms have begun to offer institutional and limited retail access to cryptoasset products to allow cryptoasset exposure; A 2022 survey found that 85% of investors “agree there is a need for open source digital currencies as a diversifier in a portfolio or treasury account.” KPMG in Canada has also added Bitcoin and Ethereum to the corporate treasury. The positioning of these large traditional finance firms is indicative of further institutional adoption of cryptoassets. Last year marked the largest year for venture funding in the cryptoasset industry. Roughly $32B was deployed throughout the year despite the many negative headlines.
Consolidation was another major theme of 2022, as there were over 250 M&A deals in the year, which represents a 13% increase since 2021. Canada also saw consolidation within its cryptoasset industry as 2022 saw a number of mergers and acquisitions.
The largest takeaway from the year, however, may be the need for proper risk management. A slew of individual actors demonstrated the need for governance, transparency, internal controls, and independent audits across the industry. The collapse of a blockchain network the Terra ecosystem led to severe financial stress and insolvency of several notable cryptoasset hedge funds. A lack of transparency allowed these funds to maintain large leveraged positions that ultimately put their respective funds in jeopardy, as underlying assets declined in value precipitously.
As the contagion propagated throughout the second half of 2022, the daisy chain culminated with the fall of several prominent cryptoasset businesses. These events revealed a lack governance and internal controls, as well as conflicts of interest and mismanagement of clients’ assets. Despite these setbacks, the industry remains resilient as more regulatory clarity emerges and the underlying technology continues to innovate.
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