7 Things That Need To Happen For Crypto To Come Back

The crypto market has been a wild ride so far, and the road got even bumpier than usual in 2022. Many are wondering what it will take for the sector to make a serious comeback. The days of greatness in 2021, where Bitcoin (BTC -0.66%) reached almost $70,000 per digital coin and Ethereum (ETH 0.12%) peaked just below $4,900, almost feels like a fever dream. Were these high prices ever real?

Now that things are starting to calm down a bit, there are a few crucial factors that can steer the market’s course. I believe that blockchain technology and cryptos will hit the mainstream eventually, but in terms of exact timing, we are all just throwing arrows at the calendar.

The future of crypto investing depends on so many factors, seemingly unrelated, that add up to a massive speed bump at the moment. Solving all these problems at once would unleash a running of the bulls worthy of a sweltering summer in Pamplona, ​​but we are far more likely to see a gradual process of steps forward and then back again.

Sevillian Flamenco, anyone? Follow the beat!

Let me count the ways

Ahem. Not sure why I’m daydreaming about summer in Spain when discussing the future of crypto. I guess I’m getting excited about the shifting promise and pulsating risks of cryptocurrencies. So let’s explore the factors that can reduce risk and release the crushing pressure on crypto prices.

1. Regulatory clarity: One of the most important challenges facing the crypto market is the lack of a clear regulatory framework. I mean, this is step #1 for good reason — most of the improvements below can’t move forward until we have firmer laws and regulations around cryptocurrency ownership, taxation, and trading. Governments and regulatory agencies—in America and around the world—must establish well-defined rules and guidelines for the industry to promote innovation while ensuring consumer protection.
2. Scalability Solutions: Scalability has long been an obstacle for cryptocurrencies, especially for widely used networks like Bitcoin and Ethereum. By using effective performance-enhancing solutions such as Lightning Network and Optimism can significantly improve transaction speeds and lower fees, making cryptocurrencies more attractive for everyday use.
3. Institutional Adoption: For cryptocurrencies to recover, institutional investors must continue to embrace digital assets. As more companies and financial institutions invest in cryptocurrencies and incorporate them into their operations, this can create a ripple effect, ultimately boosting the entire market.
4. Enhanced security: As cyber attacks and fraud continue to plague the crypto space, improving security measures is imperative. I mean, the cryptocurrencies themselves are often pretty robust, but the trading exchanges and other institutions that manage them haven’t always held up to scrutiny. More robust security protocols and tools at this level will help protect investors and create greater confidence in digital assets.
5. Education and Awareness: Public understanding of cryptocurrencies and their underlying technology remains limited. For crypto to make a comeback, it is important to raise awareness and educate people about the benefits, risks and potential uses of digital assets. Many people are under the impression that serious wealth management tools like Bitcoin and advanced financial transaction systems like Ethereum are immature toys or outright scams. In reality, these innovative assets are likely to change the nature of money, payments, ownership and transactions on a global scale. Yes, it is a serious matter. I am not exaggerating the long-term promise of properly regulated cryptocurrencies. A more informed public is more likely to embrace and adopt crypto-based economic concepts.
6. Common integration: And the education requirement ties in well with my next point. The whole reason cryptocurrencies are valuable in the first place is because they can help billions of people do many things in a cheaper, faster and more reliable way. But first, the consumer-facing tools that make that happen must be invented, developed, and removed from show-stopping bugs. In other words, digital assets must be more seamlessly integrated into everyday life. From using cryptocurrencies for daily transactions to implementing blockchain technology in various industries, making crypto more accessible and user-friendly will encourage wider adoption.
7. Market stability: Finally, for cryptocurrencies to regain their footing, the market needs to stabilize. Calmer volatility and a more mature crypto market will go a long way in inviting more risk-averse investors into the crypto space. That includes the deep pocketed financial institutions mentioned earlier.

So there you have it, folks! While these factors could set the stage for a crypto rebound, remember that it’s up to us investors to keep our wits about us and make educated decisions before jumping in. The future of the market may be shrouded in mystery, but all you need is a little patience, knowledge and a dash of courage. With these wealth building tools in your pocket, you can witness cryptocurrencies go mainstream and early crypto investors reap the rewards in the market.