3 Reasons to Invest in Crypto in 2023 – and 1 Reason Not to

It’s no secret that the past year has been tough for crypto.

Bitcoin (BTC 1.00%) and Ethereum (ETH 1.69%) are both down about 70% from their peaks, and Cardano and Solana has fallen by around 90%. These numbers are tough to stomach and many investors have fled the crypto market in recent months.

If you’re nervous about the market right now, you’re not alone. But should you continue investing? There are three reasons to stick with crypto in 2023, and one reason you’re better off avoiding it for now.

Why now can be a smart buying opportunity

1. The prices are at rock bottom

At its peak, Bitcoin cost nearly $70,000 per token, and Ethereum was priced at close to $5,000 per token. Today, Bitcoin stands at just under $21,000, with Ethereum at about $1,500.

If you’ve been looking for a more affordable time to invest in crypto, you might not get a better chance than right now. The crypto market is essentially on clearance at the moment and it is possible to load up quality investments for a fraction of the price.

2. The rise can be lucrative

Of course, no one knows for sure whether the crypto market will recover. However, downturns like this are not necessarily uncommon in this industry, and major cryptocurrencies have fared worse in the past.

For example, back in 2018, Ethereum’s price fell by almost 95% during the year. If you had invested at the lowest point, you would have seen a return of almost 4500% in just the following three years.

Ethereum price data by YCharts

Again, it is unclear what the future holds for crypto and we may not see another rally similar to the 2020-2021 rally. But even if cryptocurrencies don’t reach their all-time highs again anytime soon, even a relatively small rally can still be lucrative if you invest at rock bottom prices.

3. You may regret not investing

Crypto is a speculative investment, so no one – not even the experts – knows how it will perform in the long term. Although it can fail, it can also change the world.

When deciding whether to invest, consider which of these options you will regret the most: investing now and losing money if crypto fails, or not investing and missing out on the investment for life if crypto succeeds.

To be clear, this doesn’t mean you should go all-in and invest every penny you have in crypto. As with any investment, it’s important to buy wisely and only invest what you can afford. But for some people, it’s worth risking a little money to avoid regretting not taking this chance.

Why it might be best to avoid crypto

1. You are a risk-averse investor

For all its potential, crypto also carries a significant amount of risk. At the moment it is impossible to know if crypto will succeed and there is always a chance that you could lose what you invest. If money is tight, now may not be the best time to buy.

This investment is also notorious for its extreme volatility. Even in good times it can experience nauseating ups and downs. Not all investors have the stomach for crypto, and that’s okay. If you know you’ll lose sleep over that level of volatility, it might be better to stick with stocks for now.

The future of crypto is uncertain, and whether you choose to invest now will largely depend on your risk tolerance and personal preferences. But if a rebound is on the way, right now could be one of the best chances to buy.