Cryptos Are Back In Business

Bitcoin stages a strong recovery in 2023 and may sustain an upward momentum

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By Special Report

Published: Fri 28 Jul 2023, 1:19 PM

Last updated: Fri 28 Jul 2023, 2:49 PM

Once again, cryptocurrencies or digital currencies have become a hot topic in the world of finance and technology as some of the leading units staged a strong recovery this year.

Bitcoin, which dominates the global crypto market with almost 50 per cent of the total capital, led the chart with a significant price appreciation due to rising demand from the investors. It remained resilient despite adversities and recorded an over 75 per cent price increase to over $29,000 this year so far.

The global cryptocurrency market capitalisation is trading around $1.17 trillion, according to CoinMarketCap data. The volume of all stable coins is now stable at $23.99 billion, which is 90.5 per cent of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 48.4 per cent at the time of writing of this report.

While Bitcoin is still down by 58 per cent from its all-time high of $69,000 in 2021, investors are sure it will recover in the next two years.

The latest study forecasts that Bitcoin will close the year on a positive note and its price may hit $37, 600 by year-end.

Bitcoin, which lost nearly 65 per cent of its market value in 2022, has regained the confidence of investors. It is expected to sustain the upward momentum and may climb to a new high in the next two years by hitting $56,200 and $81,600 in 2024 and 2025, respectively.

Investors may have many reasons to remain bullish on Bitcoin, but crypto experts and analysts warn that retail investors need to be very watchful and cautious about each and every move of the leading cryptocurrency. They expect a bounce back from the present price if Bitcoin sticks to its resistance level of $30,000 as the near-term outlook is positive due to weak dollar, cool inflation data and pause in rate hike in the US.

The medium to long-term future of cryptocurrencies seems promising, with many experts believing that they have the potential to revolutionise the traditional financial system. One of the key factors driving this positive outlook is the increasing acceptance of cryptocurrencies by mainstream institutions and corporations.

“Major financial institutions are now exploring ways to incorporate cryptocurrencies into their systems, which not only increases adoption but also instills trust and legitimacy in the cryptocurrency market,” according to an analyst.

Moreover, the rise of decentralised finance (DeFi) platforms has also opened new opportunities for cryptocurrencies. At the time of writing, the total volume in DeFi is currently at $2.38 billion or 8.98 per cent of the total crypto market 24-hour volume, according to CoinMarketCap data.

DeFi allows individuals to engage in traditional financial activities, such as lending, borrowing, and staking, without any intermediaries. This eliminates the need for banks and other financial institutions, offering individuals greater control over their finances. As decentralised finance gains traction, cryptocurrencies are likely to become more widely used and accepted.

Additionally, crypto experts are of the view that the rapid development in blockchain technology, the underlying technology behind cryptocurrencies, has contributed to a positive outlook. However, they warn cryptocurrencies still face several challenges that hinder their widespread adoption.

“One of the major challenges is regulatory uncertainty. Various governments are still grappling with how to regulate cryptocurrencies, resulting in a lack of clear rules and guidelines. This uncertainty makes it difficult for businesses and investors to navigate the cryptocurrency landscape, ultimately slowing down adoption,” the expert said.

Another challenge is the ongoing issue of security and fraud. Cryptocurrencies are susceptible to hacking, scams, and theft due to their decentralised nature and lack of standard security measures. “High-profile cases of crypto theft have caused a loss of trust among potential users, hindering the growth of the market. Improving security measures and educating users about best practices is crucial to address this challenge,” said another expert.

Furthermore, cryptocurrencies also face scalability issues. Bitcoin, the first and most popular cryptocurrency, has experienced network congestion during periods of high demand, resulting in slower transaction times and higher fees. Solving the scalability problem is essential to ensure cryptocurrencies can handle large-scale adoption without compromising on speed and cost.

In conclusion, the outlook for cryptocurrencies is promising, with increasing acceptance from mainstream institutions and the rise of decentralised finance. However, challenges such as regulatory uncertainty, security concerns, and scalability issues need to be addressed to ensure widespread adoption.


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