The cryptocurrency market has evolved from what it used to be in 2013 to a very big and profitable venture. Investors have had a good share of their profits and have continued to expand their investments in different crypto platforms. On the other hand, there are concerns about the future of crypto in the coming year and beyond.
Crypto experts and brokers in India and beyond have all been positive about how the market would run in future. But for us to understand the movement and structure of how the crypto market would look, it is important to look at how far it has come and how well it is evolving to be one of the biggest things to hit the world.
Evolution of Crypto in 2020
In the early months of 2020, the performance and future of cryptocurrency looked very dim. The digital coins were having a hard bouncing back from an extended price slump. The market liquidity was relatively low and many investors were skeptical about the way forward. Eventually, an event that shook the world happened. The Covid pandemic changed the way things were done and it eventually changed the market trend.
With the series of unchecked and unmonitored spending by the Central banks, bitcoin became an alternative for many investors. The price of bitcoin sky rocked beyond what any expert could predict. This led to the crypto economy being strengthened then and made bitcoin solidify its proposition as a store of value. It broke the previous record of $20,000 and continued to set new records. Bitcoin eventually became a big beneficiary of the bad events of the pandemic.
There was a major confidence boost for investors and this led to further investments. Investors took up a risk-on profile in the midst of an economic downturn filled with low-interest rates and sudden fear of a major economic turmoil.
However, the crypto world was negatively utilized by scammers leading to a series of problems. Criminals carried out dubious transactions and ripped unsuspecting investors of their money. The volatility of the market fertilized the ground for scammers to plant seeds of fraud. A total of $1.8 billion was lost around October 2020 as a result of these scammers.
The year 2020 paved the way for an even more interesting event in 2021. The crypto economy in 2021 saw the boom and maturity of the crypto market. It had a healthy competition of different coins outperforming the other. In fact, some coins performed better than the market leader bitcoin. As a matter of fact, the leader bitcoin managed to give a return of only 59.8% in 2021, meanwhile the total market cap of the crypto rose exponentially by 187.5%, with some top-performing digital coins presenting about four to five-digit percentage returns. This was indeed an interesting time in the world of crypto.
The year 2021 was not just an outstanding year in terms of return on investments but was also a year when infrastructures grew and matured and resulted in the decorrelation of the sole crypto industry and coin. Since then, there has been significant development in the crypto structure and many freeways have opened for people to buy altcoins that void the need to purchase and use bitcoin in the process. This has resulted in many crypto prices being predicted by the amount of value they offer and the functionality of their protocols and applications instead of their tie with bitcoin.
In 2021, some payment-focused cryptocurrencies were ignored largely by investors. Instead, these investors focused more on projects with smart contract capabilities. Some of the coins that failed to reach the three-digit return of investment were coins like litecoin and bitcoin cash. On the other hand, some older coins hit the triple-digit return of investment. Cardano, for example, had one of the best runs and with 621% proved to be the best performing old coin.
Ethereum also performed better than bitcoin in 2021 giving a return of 399.2%. this year gave rise to the creation of NFT and DeFi 2.0 protocol and they went on to change the game of crypto. There became a popular demand and rise in this network activity with a 50% increase in transfer causing the gas fee of Ethereum to surge significantly.
The market migrated from a minimum of $20 for a single transaction to the mint price of NFTs starting from $40. This gave rise to the majority of the crypto crowd moving away to other smart contract platforms with a relatively lower fee.
Many smart contract platforms like the Solana which capped at 11,178% Avalanche and even Fanthom had about four to five per cent returns and eventually built their own NFT market and decentralized finance ecosystem. Crypto games and multiverse projects became solid projects. Axie infinity became the first crypto game to launch a play-to-earn structure while incorporating their native token AXS and their in-game NFT thereby becoming the next big thing in most parts of Asia and India.
The Future of Crypto in 2023 and Beyond
Developing regulation changes had a negative effect on the crypto economy in 2022. the crypto market looked very gloomy within the first quarter of 2022. With over a 50% price collapse, digital coins had to struggle to keep up. The crypto market largely came to a standstill and gave investors a hard time thinking of the next move.
An example is LUNA which had a 93.84% crash in May 2022. The price fell from over $100 to about $0.0001 and eventually had to be delisted on some trading platforms. It eventually assumed a new name LUNC.
The reality is that the crypto industry is still young and growing constantly. A sudden spike in price upwards can be followed by a sudden crash in price. But either way, the market continues to assume new positions.
The year 2023 has been projected as a year where these crashed prices will turn around and do well. Experts have projected an upward market trend, especially in the price of bitcoin. A closer study has shown that there is good resistance at one point or the other and there is potential for bitcoin to rise to over $50,000.
With the growing adoption of crypto as a mode of payment by some institutions and some favorable government policies, there is hope of a strong crypto market emerging. Lower market trends might have negatively impacted the crypto world in 2022, but positive momentum is seen in one area or the other.
As much as it is impossible to predict exactly how the market would move, there is a high wave of hope that the new regulations being put in place would favor the market. Some regulations like the KYC policy have also been implemented to curb criminal activities in the market. With these things put in place, there is a great potential that crypto in 2023 and beyond would be a force to reckon with.
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