As we draw closer to the third and last quarter of 2022, many people have wondered how much relevance digital currencies will have by the end of the year. After performing exceptionally well in 2021, the crypto market seems to be on a slow and steady rise in 2022. Since the start of the year, digital assets have shown a high level of market volatility. However, everyday users have not changed the cause in their quest for financial freedom. It has even gotten better with many governments sticking their necks in the crypto space.
Institutional investors are also not left out, as global companies have made cryptocurrency investments a vital part of their asset class. Tesla, Microstrategy, Riot Blockchain, and Coinbase publicly claim to hold Bitcoin and other cryptocurrencies. Interestingly, these organisations claim they have no intention of selling soon. So, what does this mean for the average investor? Will the recent cryptocurrency regulation affect it positively or expose it as a speculative bubble? While time can only reveal, many investors in the crypto ecosystem believe that the future of cryptocurrency is scintillating. Find out if recent events agree with this opinion. Stick to every detail of this article and learn if owning cryptocurrency is one way to be a part of the future.
Digital Currencies: The Race to the Top
Over the past few years, investing in digital currencies has been one of the most effective ways to create passive income. For others, the same way provides a secure pathway to protect wealth despite market data showing extreme market volatility. While assets like stocks and ETFs are somewhat significant, cryptocurrencies have repeatedly proven to be the one that rides over the inadequacy of traditional finance.
According to Bloomberg news, the overall cryptocurrency market value added over $1.5 trillion in 2021, with Bitcoin dominating the pack. Despite the increase, more institutional money and retail funds have continued to rain into the blockchain-powered assets. While this rise has not been straightforward since its invention, the security, technology, and value these currencies add to the world have been highly remarkable. Let's go down memory lane a bit, starting with Bitcoin.
As of 2011, not many people regarded Bitcoin as a currency that would last ten solid years. Despite glaring proof that it was not something to underrate, many people mocked– even some of the world's wealthiest. With a $1 unit price at that time, Bitcoin proved to be a strong investment even as a new asset class. In November 2013, 1 Bitcoin was worth $350. In the same month, the coin price, against all odds, went as high as $1,242 as it started to gain more massive attention. While Bitcoin price had dropped to unimaginable lows during this rise, the currency has not failed to recover. The same can be said of some other cryptocurrencies, which many traditional banks look to for several partnerships.
Government Regulation and Adoption of a Digital Currency
Since it has become evident that the crypto market is here to stay, governments have no option but to participate. Take, for Example– El Salvador, the country that has pumped millions of dollars into Bitcoin and made it legal tender. In other cases, some governments have created their Central Bank Digital Currency (CBDC) in their pursuit not to concede defeat to the invention fully.
However, this act has not deterred cryptocurrency investors from injecting more funds into the space. The Security Exchange Commission (SEC) has tried to bring down some of its services, all to no avail. While the concerns about internet users using cryptos to commit fraud might be legit, many believe it still doesn't justify the widespread cryptocurrency ban proposed by some agency sections. With the SEC's new chairman holding up for regulation over the ban, the crypto community has won the round for its longevity. That said, what does the future hold for cryptocurrencies and the market? Let's give a few answers as we conclude this article.
Final Thoughts: Will the Crypto Market Remain?
As you probably know, the cryptocurrency market will not be disappearing anytime soon. Despite attacks and the risks involved, investors have continued to trade. It would also interest you to know that adoption has risen in large numbers over the past few months. With new projects emerging, and real-life problems solved with these assets, it doesn't appear that we will see the end of the cryptocurrencies or the market in 2022 or the near future. So, yes! The cryptocurrency market could stand as long as we live on the planet.