If the latest reports are anything to go by, confidence in the market among individual investors is at an all-time low.
This has been fueled by high inflation, a creeping cost of living, the increased cost of borrowing and the threat of a looming recession that seems to have been haunting us for months now. As a result of this, retail traders and investors are now fairly certain that equities will hit rock bottom in 2023, after plummeting for some time already.
Many retail investors are similarly gloomy about the state of the cryptocurrency world. With around 44% of those retail investors surveyed believing that Bitcoin will trade lower in 2023 than in 2022.
With all this gloomy news circulating online, it is hard not to think that 2023 will be a bit of a depressing one for the crypto space.
Although no one can ever be certain, despite the fact that the prices of certain cryptos might trade lower in the coming months, there are still plenty of reasons to be positive about the sector as a whole. But what are some of these reasons and why should we be optimistic about the outlook for cryptos in the year to come?
Reason 1: Institutional investment remains strong
Despite the many scandals that have hit the industry and the constant ebb and flow of market prices, institutional investment in the crypto space remains relatively strong. According to one survey, 58% of institutional investors surveyed bought crypto in the first half of 2022, with 74% of those surveyed planning to invest in the near future.
Reason 2: Blue chip company support also remains strong
Much like the institutional investors, blue chip companies are also doubling down on their support of cryptos. This includes companies such as Google’s parent company Alphabet and Mastercard.
Reason 3: Fed rates will likely stabilize
One of the main things that has spooked investors from loading up on crypto is the interest rate increases unleashed by central banks to curb inflation. However, as interest rates begin to stabilize and, eventually, fall, this will more than likely start to funnel investment back into riskier investments such as crypto.
Reason 4: Innovation remains strong
Another reason to be positive about the future of cryptocurrencies is that innovation in the industry remains incredibly strong. As we can see from the latest cryptocurrency list, there are still many new and exciting projects that we have yet to see the full potential of. This includes exciting, creative and innovative projects such as Smooth Love Potion (SLP), which have been underway for some time already.
Reason 5: Ethereum developments signal a strong future
Another positive sign for the crypto sector going into 2023 is the performance of Ethereum. Although its price has been relatively unstable, the development work going on behind the scenes continues at a rapid rate. These internet network upgrades have helped to make Ethereum better, more efficient and much cheaper to process transactions.
Reason 6: Regulation is on the way
While for some, regulation might be seen as the very antithesis of projects like Bitcoin, for others, it is a way of legitimizing the sector. Regardless of where you fall on this spectrum, however, there is no getting around the fact that more regulation is on the way. This will hopefully help to encourage investment in the entire sector by providing much needed protection to investors.
Reason 7: Winter only lasts so long
Although talk of the ‘crypto winter’ we find ourselves in has been building for some time, if the history of crypto has taught us anything, it is that winter only lasts so long. All the periods of growth that crypto has experienced have been preceded by long periods of price stagnation and decline. If the analysts’ predictions are correct, these prices look set to bottom out in 2023.
Reason 8: We are still early on in our journey
Perhaps the most important reason that we need to keep reminding ourselves that the future still looks very bright for the cryptocurrency sector is that we are still very early on in the journey. Cryptocurrencies only emerged for the first time in 2009 when Bitcoin was launched.
Since then, the cryptocurrency sector has expanded to include a staggering array of around 21,000 different cryptocurrencies, with the industry itself worth something in the region of $800bn.
This is a truly incredibly achievement for such a young industry. Given that we are only a little over a decade into this weird and wonderful technological experiment, the future looks very bright!
