The global crypto market is currently in the doldrums, with an extended year long bearish streak wiping out $2 trillion in market values, and a string of multi-billion dollar debacles, starting with Terra and Celsius, and finally with FTX last month. While all of this has taken sheen from this once galloping digital economy, it is still too soon to call it quits, especially with the string of disruptions headed our way.
While there are some skeptics and naysayers who are already writing obituaries for the global crypto market, a few other long-time proponents only see this as a temporary blip.
Without giving in to sensationalized headlines and takes from experts and influences with a vested interest in this market, here are some objective reasons why now is the best time to invest in cryptocurrency markets.
1. Record Low Values
Following the pullback over the past 12 months, Bitcoin now trades at its 2020 levels, while Etheruem, along with most major altcoins, have wiped out their entire 2021 gains. This represents a stellar wealth creation opportunity for investors who missed out previously.
While this line of thought might come across as a 'value trap' or trying to catch a falling knife, there are plenty of cases in support of it, most of which we will go over in the below sections. Most importantly, contrary to what skeptics say, cryptocurrencies are increasingly making their way onto the mainstream, adding value and holding real utility to the real world economy.
2. Increased Transparency
The FTX debacle in recent weeks was the last straw, and now centralized exchanges are striving to address critical issues such as their lack of transparency, and opaqueness in their operations.
This includes novel concepts such as the 'Proof-of-Reserves' which involves an independent audit using a cryptographic Merkle tree to prove that the exchange is maintaining and acting as a responsible custodian of its customer's account balances.
3. Shift To DeFi
Beyond increased transparency at centralized exchanges, the fallout of FTX has effectively tilted the scales in favor of DeFi or decentralized finance. Even though DeFi was how crypto was originally envisioned, it gave way to the billion dollar funding and flashing promotional campaigns of centralized exchanges such as FTX, which in hindsight was a mistake.
As the dust settles, we will see strong secular tailwinds in favor of DeFi platforms, exchanges, and startups, all infusing a fresh lease of life into the global cryptocurrency markets.
4. Halving & Triple-Halving
Bitcoin and Ethereum, the two bellwethers for the broader crypto ecosystem have massive catalysts in-store for the years ahead. This starts with Ethereum's Triple Halving which is already underway since September 2022, and essentially means that new Ether being issued will drop significantly, reducing supply, and lending much needed support for the cryptocurrency.
Bitcoin is set to hit the same milestone in 2024, a significant event that will reduce the rewards available for mining, removing incentives for the creation of more Bitcoin. Both these events will result in a robust upward momentum for the ecosystem, creating plenty of value for investors.
Final Words
Global cryptocurrency markets remain at a crucial juncture and it will be interesting to see what 2023 holds.
That being said, given the substantial value and utility held by this market for the real global economy, the long-term trajectory will always trend upwards, with a few minor blips and bearish streaks in-between.
While traders and investors who got into crypto late in 2021 are regretting their decisions, early-adopters and long term proponents have remained steady in the face of this massive volatility and headwinds, because this wasn't their first bear market, and sure as hell won't be their last.
