You may not be too eager to enter the cryptocurrency market right now. The market value has shrunk by more than $1 trillion since the start of the year. And even the greatest players like Bitcoin (BTC -1.93%) and Ethereum (ETH -4.47%) fell nearly 60% during this period.
But there are reasons to look beyond the gloom – and focus on what could be a very promising future. In fact, there are three obvious reasons to buy more cryptocurrency today, even with financial markets in the doldrums. Let’s take a closer look.
1. Attractive prices
Investors have shunned riskier assets – such as cryptocurrency – amid worries about the economy. And this has resulted in declines for, as I mentioned above, even top crypto players.
Emerging cryptocurrencies such as Solana (FLOOR -3.00%) and gimbal (ADA 3.02%) have suffered. They have lost more than 80% and 60% respectively since the start of the year.
It is tempting to buy assets as their prices rise. It often looks like they are sure to win. But the time to enter the market – or buy more than one asset – is actually when the particular asset is on sale. And that is the case today with the cryptocurrencies I mentioned above and many more.
That doesn’t mean it’s time to stock up and buy any cryptocurrency that’s been losing ground. It is essential to carefully consider each player before buying. Is Crypto Attracting Users and Developers? Does it have the potential to transform the way business is conducted? Does the technology work?
These are all key questions to ask. If the responses are positive, a drop in the price of that particular crypto can be a great buying opportunity. It is important to remember that cryptocurrencies have fallen significantly in the past – and eventually rebounded.
2. Stories that haven’t changed
Cryptocurrency prices have fallen across the board. Rising inflation and economic concerns are hurting financial markets today. At the same time, however, the stories of cryptocurrency gamers have not changed.
The current economic situation does not hinder a crypto’s ability to make its blockchain faster or more efficient. And that won’t stop the player’s ability to progress, bring in new developers, and eventually bring more and more apps to the blockchain.
Thus, a decline in cryptocurrency prices today does not reflect the potential of the industry. If a year ago you were positive about cryptocurrency’s ability to change the financial world — and even other areas, such as entertainment — there’s reason to still be positive. about it today.
3. Key steps ahead
Key moments are fast approaching for various crypto players. And these can pave the way for future success – for these players and their investors.
For example, this month alone we can expect two. Ethereum is about to complete “The Merge”. This is the merger of its Beacon channel with its mainnet. The result? Ethereum will officially change the method it uses to validate Proof-of-Stake transactions from Proof-of-Work.
This will reduce network energy consumption by 99%. And this is part of the general update intended to increase transaction speed and reduce transaction costs.
Another big event this month: Cardano plans to launch the Vasil hard fork. This is an update that will improve the performance of the blockchain. And that could bring more and more developers – and users – down the road.
Of course, before increasing your position in cryptocurrency, it is essential to look at your own comfort with risk. The industry is risky because it is fairly new. That means it’s hard to fully predict what it will look like in a few years. So never invest more than you can afford to lose.
But if you’re willing to bet on long-term cryptocurrency success, for the reasons I’ve discussed above, now is a great time to do so.
Adria Cimino holds positions in Ethereum. The Motley Fool has positions and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.