2023 has started on a fresh and positive note for most cryptocurrencies. After bearing the brunt last year, most tokens have taken the road to recovery. However, prices are still very low from their all-time highs, which were seen during the 2021 bull run.
So what will the other half of 2023 look like, will it be a year of slow growth or will the cryptocurrency market be able to reach new highs and recoup all the losses suffered in 2022.
Please invest carefully, your capital is at risk
What's happening in the crypto market?
The entire crypto market wobbles from side to side, comfortable in gentle curves and limited range. After the FTX fallout in 2022, confidence in these currencies was shattered and the market headed totally down with no signs of slowing down. However, 2023 has brought a new opening for major digital currencies including Bitcoin and Ethereum, and the crypto market has gradually started to turn green due to the relaxed macroeconomic situation and cooling inflation.
If we see the current volume of the digital market, it stands firmly at $1.20 trillion as the total market capitalization with a daily volume of $70 billion. However, if we talk about the two biggest currencies in the world, then BTC and ETH clearly top the charts. Bitcoin is up almost 80% this year and likewise Ethereum has almost posted a 65% rally so far this year.
Crypto experts believe that the current situation is comfortable but the road to recovery is still very long. As most currencies are still way behind their all-time highs. As Bitcoin is still down 50% from its all-time high which touched in November 2021 at $69,000, so too Ethereum, which is now trading at $1,900, hit the all-time high of $4,000, in 2021.
However, the good news is that 2023 was able to absorb all the big losses the market suffered in 2022. If we look at April numbers, then BTC and ETH jumped 17% and 46%, which is a remarkable feat. . Similarly, Cardano (ADA) also recorded a gain of more than 50% in the first four months of this year.
In March, news from SVB Financial (SIVB) and other major US banks raised concerns about the stability of the conventional banking system. However, the fallout in the banking sector has dramatically shifted investor sentiments towards decentralized finance, which has propelled BTC to its highest level of $30,000 since June 2022.
That said, so far the crypto market has undoubtedly responded positively to the SVB crash and hoped for a pause in the US interest rate hike cycle amid tighter conditions. credit and lending standards, but since crypto cannot sail this boat alone, all other financial assets must follow the same sentiment for a balanced atmosphere.
Reasons Behind Crypto Collapse In 2022
The cryptocurrency, known for its extreme volatility, has had a tumultuous time in 2022. The main reason for the market slowdown is the downfall of one of the world's largest cryptocurrency exchanges, FTX. The bankruptcy of FTX and its spat with Binance not only triggered a huge sell-off in the market, but also reduced liquidity in the crypto market.
Binance, the world's largest global cryptocurrency platform, was ready to buy rival FTX, but quickly backed away from the proposed takeover deal, citing multiple issues with FTX's finances and regulatory investigations. Binance's move stunned crypto investors and dropped Bitcoin to a two-year low, which touched $69,000 in November 2021.
This surprising turn of events has led to a turmoil-like situation in the crypto industry, which has resulted in a high level of mistrust and skepticism among investors towards centralized crypto establishments and on the regulatory front.
The FTX contagion effect is quite obvious, several questions have now been raised about the survival of other trading and lending companies such as Gemini, Coinbase. Experts believe that their survival depends strictly on their regulatory, governance and management practices.
Besides the sudden fallout from FTX and its contagion effect, rising interest rates and the recent hawkish tone of US Federal Reserve monetary policy tightening have also added fuel to the fire.
Is it safe to invest in cryptocurrency right now?
The cryptocurrency market has seen worse, whether it's the crash of Terra-Luna or the aftermath of the Russian-Ukrainian war, tougher tax regulations and then the collapse of FTX, the cryptocurrency market. crypto has literally been through the fiercest storms in the past few years.
2023 gave the scorched crypto market a fresh start and showed positive signs and an upward recovery.
Crypto experts believe that in this type of scenario, seasoned investors may seek to invest in stable and firm digital coins such as Bitcoin or Ethereum in Systematic Investment Planning (SIP) format. Investors should only give 5% exposure to cryptocurrencies in their overall portfolio.
It should be noted that crypto prices are very volatile and extremely speculative, so it is advisable to invest only a tiny amount that you can afford to lose.
Step-by-step guide on how to invest in the Indian cryptocurrency market
Select a crypto currency: Choose a cryptocurrency you want to invest in. Like any other asset class, each cryptocurrency has its own fundamentals and relies on different blockchain networks, mining techniques, and intrinsic value. As cryptocurrencies are extremely volatile, it is crucial to do your research well and then decide how much money should be invested in that specific cryptocurrency.
Select a cryptocurrency exchange: To make a purchase of cryptocurrency, it is essential that you have a functioning account in a cryptocurrency exchange. A cryptocurrency exchange is an online trading platform that helps you buy or sell cryptocurrency. To learn about the best cryptocurrency exchanges in India, read our article “Comparing Cryptocurrency Exchanges in India” for more exchange information.
Once you have selected a cryptocurrency exchange of your choice, you need to register by providing the personal information such as your name, address and complete KYC formalities. Then you receive a deposit address from the platform. Once you get that, you are ready to invest.
Choose your comfortable payment method: Once you have selected your cryptocurrency exchange of choice, be sure to also select the most viable online payment method, such as credit/debit cards or instant bank transfers, peer-to-peer options. to-peer (P2P), or even a crypto wallet. You need to add funds to your payment gateway in order to buy cryptocurrency.
Buy cryptocurrency: After adding the funds, you can now easily buy the cryptocurrency you selected. After registering the crypto platform with the added funds, you will need to select the chosen crypto coin from the different currencies, which will be displayed in relation to their current market price, total volume, exchange symbol and currency. other relevant market information. You need to click on the "buy" tab which will help you buy the cryptocurrency you have selected.
Store your crypto securely: Once you receive the crypto coins in the fiat currency exchange, remember to store your currencies in the most secure manner. Remember that cryptocurrencies are not backed by any regulated entity and therefore it is very important to secure them securely as they are always at risk of theft or hacking.
While almost all exchanges offer online wallet options, some investors also prefer cold storage, which allows you to save your coins offline. Cold wallets are not connected via the internet and are therefore considered one of the safest options for holding cryptocurrencies.
“Sell” on time: This is a very crucial step, which finally helps you earn money by investing in any cryptocurrency. In the same way that you placed an order to "buy" a cryptocurrency, you can sell the cryptocurrency by clicking on the "sell" tab which will appear in your wallet. The investor also has the option of selling his investment wholly or partially based on his own call. It is very important to book your profits in a timely manner.
Please invest with caution, your capital is at risk
With the surrounding uncertainty and the slow recovery of macroeconomic situations around the world, it is better to observe market movements with caution. It is definitely a good time to closely observe the details of the cryptocurrency market and not make impulsive and rash decisions.
And you never know, once this chaos completely subsides, crypto investors may be able to find their favorite digital assets at a fair value.