2022 was a tough year for crypto. Nevertheless, there are also some positive things. Here are 5 positive takeaways for crypto investors.
1. A pretty standard bear market
The collapse of LUNA, FTX, etc. hurt a lot and we will still feel the effects in the coming years — but overall the crypto market coped well. This bear market saw a 70 to 80% drop, which is well within the normal range. The preliminary bottom for Bitcoin was $15K. That wasn’t as bad as feared right after the FTX disaster. At the moment it looks like the worst is behind us.
However, we should expect to see sideways action for many months to come. Here are 3 scenarios of how this bear market will play out in the coming months. 👇👇
3 Scenarios of How the 2021–23 Crypto Bear Market Will End
2. Lots of positive developments
Regardless of the usual dramas of the cryptoverse, the long-term trend continues to look good. A few positive facts and developments:
- Unfazed by anything, Bitcoin produces a new block every 10 minutes. Reliable like clockwork.
- The successful Ethereum merge.
- DeFi humming along in the background 24/7. Of course, there are still problems. But on the whole, it shows that DeFi works and is slowly but surely developing into a real alternative to traditional financial solutions.
- The rise of Zk-SNARKs: a zero-knowledge proof by which one party can prove to another party that they know a certain piece of information without revealing what that information is. They allow for the creation of private transactions on the blockchain.
- Crypto adoption continues to grow. Stripe, Reddit, and many other companies are increasingly integrating cryptocurrencies into their processes.
3. More people are realizing the importance of decentralization
The collapses of LUNA, FTX, and others have once again confirmed that centralized crypto services and providers should never be over-trusted. Nobody is too big to fail.
This does not only apply to the crypto sphere. Throughout this year, various events in politics and the real economy are convincing more and more people that centralized institutions can no longer be fully trusted.
At the same time, however, we must also be aware that we will not be able to do without centralization for the foreseeable future, both in crypto and elsewhere. 👇👇
Centralization Harms Crypto. But It’s Here To Stay.
4. 2022 was a year to learn — 2023 will be a year to implement
Bear markets are a time for investors to reassess their goals and strategies, and to learn more about the cryptocurrency industry.
Take a step back and think about how and where you developed a deeper understanding of individual projects and the market as a whole. Use these insights to form a strategy for 2023. Find answers to the following questions:
- How has the market developed in general — what trends can be identified?
- Which projects have performed well and which are less so?
- Which crypto sectors offer the greatest potential?
- When is the best time for you to invest and do you have the necessary funds to do so?
5. We are still early
Crypto has received a lot of media and political attention, not least because of the numerous sensational events this year.
However, we must not forget that the technology is still in its early stages when it comes to global adoption. The following chart by Wells Fargo shows that Bitcoin is nearing a ‘hyper-adoption phase’. Similar to the internet in the mid 1990s.
This chart shows that the ownership of cryptocurrencies is just in the early stages in many countries. However, the countries with the highest adoption of cryptocurrencies are some of the same that have been screwed most badly for 60+ years by IMF and World Bank policy: Argentina, Philippines, Brazil, Nigeria, Thailand, India, Turkey. Expect these figures to increase while the current global economic crisis continues to advance.
Be patient.
All Comments