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Crypto Data Points to Strong Long-Term Growth – Is It Time to Buy the Dip?

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Data shows the cryptocurrency market will have a CAGR of 12.28% by 2028

The cryptocurrency market has been on a downtrend for the better part of 2022. There also doesn’t seem to be much reprieve for cryptocurrency investors anytime soon. A combination of external factors (interest rate hikes) and internal factors (Terra crash) has added to the dark cloud over crypto. 

Interestingly, this is the perfect market for savvy investors. That’s because everything is selling at a discount, and despite the price drop, many positive developments are happening within the cryptocurrency ecosystem. It’s like 2018 all over again. In fact, from a technical development perspective, the cryptocurrency ecosystem is more robust than it was 4-years ago.

This is not speculation but solid data that shows that cryptocurrency developments are gaining traction. According to research by BlueWeave Consulting, the cryptocurrency market worldwide was worth $1.3 billion in 2021 and is expected to grow at a Compound Annual Growth Rate of 12.2% by 2028. The report attributed this to technical developments and the fact that more businesses than ever before, are now adopting cryptocurrency payments.

The report notes that the COVID-19 pandemic triggered a paradigm shift in how people live, positively impacting the cryptocurrency market. For instance, it states that after the pandemic started, many countries began to view cryptocurrencies as a viable alternative market that can substitute traditional markets. 

However, the most exciting facet of the report is that it points to regulations as a positive factor in the long-term growth of the cryptocurrency market. To back this up, the researchers at BlueWeave found that North America has the fastest growing adoption rates of cryptocurrencies in business. They attributed this directly to favorable cryptocurrency regulations in this market. 

Essentially, this means that if regulations improve across the globe, the same growth experienced in North America could be replicated worldwide.

The Odds Favor Crypto Growth

If this report is anything to go by, then there is every reason to buy cryptocurrencies while still trading at record lows. For instance, the report points to a correlation between regulations and cryptocurrency adoption, and that’s a good sign. 

Since 2017, there has been an increase in countries with a favorable view of cryptocurrencies. The biggest is El Salvador, which announced that it would accept Bitcoin as legal tender back in 2021. Several others, especially in the developing world, have shown pro-crypto tendencies.

As more countries take this direction and businesses adopt cryptocurrency as payments, the potential for adoption is pretty high. We are likely to see an explosion of cryptocurrency-focused business solutions dispersed worldwide.

Where to Invest?

Now that all indicators point to the growth of the cryptocurrency market, which aspects of the market should you invest in?

While there is no clear answer to this question, overall market dynamics can help you determine the best cryptocurrencies in anticipation of long-term market growth. 

So far, most of the investments have gone towards Web 3, DeFi, and the Metaverse. In all three of these aspects of the market, there has been an increase in multi-million-dollar investments, all of which indicate that smart money believes they will grow at an exponential rate going into the future. 

An example of this is the move by blockchain lender Nexo, which recently created a $150 million division that is focused on Web 3.0 acquisitions and other developments. The new spinoff will be headed by Tatiana Metodieva, who is the head of corporate finance at Nexo. 

While commenting on the move to create a spinoff focused on Web 3.0, Tatiana said that they intend to work closely with Nexo users so that users can also have a chance at growing wealth while diversifying their portfolios.

In the Metaverse space, gaming seems to be gaining traction faster than other market aspects. At the moment, play-to-earn gaming is one of the fastest-growing aspects of cryptocurrency, and investors are throwing millions of dollars at this market on the expectation that the market is set to grow. 

For context on how much money is flowing into Play-to-Earn gaming, FTX invested $100 million into a Solana-focused blockchain gaming platform. Many other companies have pumped millions into the market as well. 

DeFi has also been attracting lots of investments lately. For instance, in March 2022, a Singapore-based DeFi platform called Cake DeFi announced that it was putting $100 million into DeFi. Cake DeFi announced the investment would be utilized through Cake DeFi Ventures (CDV) and would go towards investments in high potential DeFi projects. 

What to Buy?

Now that you know where the money is flowing, the next step is to look for cryptocurrencies that have potential within these market segments. No one has a crystal ball to pick winners from losers in any given market. However, there are steps that you can take and increase your odds of success when investing in Web 3, the Metaverse, or in DeFi. They are as below:

  1. Go only for projects with high volumes and strong communities

Cryptocurrencies are all about communities, and the more people know about a project, the higher its odds of success long term. 

  • Have a long-term view of the market 

To increase the odds of success with any investment, always take a long-term view of the market. Even those pumping billions of dollars into these areas of the crypto market are doing so with a long-term view of the market. As such, whatever project you choose, look at it from the perspective of the next 5 to 10 years. 

Conclusion

Data indicates that the crypto market is on a growth trajectory, despite the bear market. The key areas of the market likely to record the most growth are Web 3, DeFi, and the Metaverse. While there are many cryptocurrencies to buy in these three market categories, it is best to only go for those with some market traction and a strong community. It is also essential to have a long-term view of the market for higher odds of success.