10 Signs This Will Be a Great Year for Crypto

Cryptocurrencies are known to be volatile, and the value of the major currencies has changed over the years, going both up and down.  There are reasons to believe that this year would be especially lucrative for investing in cryptocurrencies.

Many conditions need to be met for such an outlook.  It started years ago with the wider adoption of cryptocurrency payments.  This further led to more regulations in the industry, and worldwide inflation made cryptos an interesting hedge against it.  This article will explore the state of the crypto industry and what it means for potential investments.

Bitcoin Value

Bitcoin has been growing in value steadily for months now, and there are always rumors it will break one barrier or another.  Such arbitrary lines over which Bitcoin needs to go can be important as a way to encourage potential investors that Bitcoin is, in fact, souring.

The Bitcoin price is $66,507.81, a change of 3.06% over the past 24 hours as of 2:58 a.m.  The recent price action in Bitcoin left the token market capitalization at $1.31T.  So far this year, Bitcoin has changed 57.86%.

Introduction of Bitcoin ETFs

This was an important year for crypto since it’s the year in which crypto ETFs have been adopted.  A Bitcoin ETF (Exchange-Traded Fund) is a type of investment fund that tracks the price of Bitcoin, the popular cryptocurrency, and allows investors to buy and sell shares of the fund on a stock exchange.

ETFs, therefore, work as stock portfolios, which are valued based on the value of Bitcoin.  It allows investors to invest in crypto without having to buy coins themselves.  Traditional financial institutions are finding their way into crypto by combining it with the financial markets they are familiar with.

Wider Adoption

The overall attitude towards using crypto for payments and savings has changed.  At first, crypto was a niche interest, but just a few years later, it was widely used as a payment method in some industries.  It started crypto sports betting, but soon, there were other industries interested in staying at the edge of tech development.

Now, crypto is accepted in almost every industry, including the conservative ones such as insurance and pension funds.  Some popular luxury brands have also started accepting payments in crypto, which is a good sign when it comes to where the industry is heading.

Ethereum Update

Ethereum has gone through a major update this year.  It was the biggest update it has had in years.  The update, called Dencun, was significant enough to stop the payments made in Ethereum for a few days.  The update brings in a new method of storing data, which uses less energy.

The update is made so that Ethereum can bring in more users and allow for more daily transactions.  All of this is to say that Ethereum is trying to expand.

Ethereum Price

The Ethereum price is $3,430.41, a change of 2.62% over the past 24 hours as of 3:23 a.m.  The recent price action in Ethereum left the token market capitalization at $411.90B.  There has been a steady rise in the last couple of months, especially because there are confirmed rumors about ETFs based on Ethereum.

There are some who are worried, however, that it won’t manage to get to the price that some investors have envisioned for the end of the year.  This isn’t a problem on its own unless investors have staked too much on the altcoin, reaching a certain amount.

Rise of Altcoins

Altcoins are on the rise alongside Ethereum, as the changes in the market are affecting the smaller coins in a similar fashion to the biggest ones.  There’s also a move on the part of savvy investors to hedge their crypto investments and look for alternatives.

The same goes for the interest in stablecoins, as they are an investment between traditional fiat currency and cryptocurrencies.  The value of stablecoins is tied to the value of fiat money – usually, the US dollar, which allows them to provide the best of both worlds.

Emergence Of Meme Coins

Meme coins were popular at first, and some of them have managed to break into the mainstream and become widely used real cryptocurrencies.  Ellon Musk popularized the most popular of these, DogeCoin, and it is now quite a successful cryptocurrency regardless of the initial hype.

Recently, a similar thing started to happen with a meme coin called the MAGA coin. It’s a cryptocurrency made to promote support for Donald Trump’s election campaign, but it has the potential to become a real crypto with a wide community around it. Meme coins are an interesting sign of the times, as they show that there’s an online culture and humor around the idea.

More Regulations

Now, when cryptocurrencies are on the rise, there’s also a change in terms of regulation.  The EU has come up with a comprehensive set of regulations that govern crypto investments.  At the moment, it’s the most complex regulation regarding crypto, and the US and Japan will probably take note of it and try to mimic it to an extent.

There’s also a lot of focus on anti-money-laundering efforts.  Some of these are already noticeable to day-to-day users.  Some businesses have started asking users to provide an ID before they can pay with crypto as a part of the Know Your Customer regulations.

Conservative Financial Institutions

 Conservative financial institutions are changing their mind on cryptocurrencies, which is a sign of a long-term trend.  Institutions such as banks and retirement funds are putting a portion of their long-term investments in crypto.  This means that they see it as a viable option for years, if not decades, to come and that their conservative clients are fine with it.

For just a few years, this wasn’t an option anyone had considered at all.  The change in attitude towards crypto shows that institutions will adapt, and innovative concepts will prevail if they bring value.

Inflation

High inflation, in general, isn’t a good financial metric, and the fact that we can’t bring down inflation for such a long time is a sign of trouble for the economy overall.  However, it can be a good thing for the crypto market, as cryptocurrencies are often seen as a hedge against inflation, and that’s why many buy them.

The value of cryptocurrencies isn’t tied to any centralized financial institution or central bank; therefore, it won’t be affected by inflation the way most other currencies and assets will.  Some investors are buying crypto alongside gold to keep their assets while the financial crisis is in full swing.

Conclusion

There are clear signs that it’s a good year to invest in cryptocurrencies. Some of these are about the overall economy, and others are about the changing attitudes regarding crypto.  Banks, stocks, and traditional businesses are all starting to accept crypto.

The big cryptos are also rising in price and making moves to allow more users and more onboarding.  At the same time, with more users, there will be a bit more regulation in the industry.  The EU has already started with heavy regulations, and the US will follow.

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