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Crypto Price Growth – What Does the Market Need?

By  //  October 20, 2023

The crypto market has recorded significant growth since the creation of Bitcoin in 2009. The large potentials found in cryptocurrencies have attracted both retail and institutional investors into it leading to impressive price growth in the past years.

However, these growths have hardly been sustainable as prices often crash after each explosion. This has raised serious concerns among investors on the best practices to bring about sustainable growth in the crypto landscape today. This article considered important factors that could drive sustainable growth in the crypto industry in the future. 

Potential Factors to Drive Crypto Price Growth 

There are some necessary factors to drive sustained growth in the crypto market today:

  1. a) Mass Adoption and Use Cases: One of the fundamental requirements for sustained crypto price growth is widespread adoption. Cryptocurrencies need to transcend their status as speculative assets and find genuine use cases in various industries. Bitcoin, for instance, has paved the way as a store of value. Ethereum, on its part, has opened doors to decentralized applications and smart contracts. Other cryptocurrencies too, need to toe this part and provide more value to users to attract more users to buy Cryptocurrency online. 
  2. b) Regulatory Clarity: Regulatory uncertainty has been a significant impediment to the crypto market’s growth. Governments and financial authorities worldwide are still grappling with how to regulate cryptocurrencies. A clear and balanced regulatory framework is essential to provide investors, institutions, and businesses with confidence to enter the crypto space.
  3. c) Reduced volatility: The high volatility of the cryptocurrency market has been a major barrier to the wider adoption of cryptocurrencies today. Investors are more likely to invest in assets that are less volatile and have a more predictable price trajectory. This is often the reason why some investors prefer to buy Easyjet (EZJ) shares, ETFs,  bonds, and derivatives rather than invest directly in crypto. 
  4. d) Institutional Investment: The entry of institutional investors has been a game-changer for the crypto market. Institutional participation brings liquidity, credibility, and stability. The market needs more institutional-grade products and services, such as exchange-traded funds (ETFs), custody solutions, and derivatives markets, to attract and retain these players.
  5. e) Security and Trust: Security breaches and fraud have plagued the crypto industry. Improved security measures, robust authentication methods, and more user-friendly wallet solutions are crucial to building trust among institutional investors today.
  6. f) Scalability and Sustainability:

Scalability issues have limited the growth of some cryptocurrencies, due to their higher transaction fees and slower confirmation times during peak demand. Addressing these scalability issues is crucial for a wider adoption of cryptocurrencies across the globe. 

  1. g) Market Education: Widespread adoption can only occur when people understand cryptocurrencies and blockchain technology. Educational initiatives aimed at the public, businesses, and policymakers are necessary to dispel misconceptions and promote responsible participation in the crypto market.
  2. h) Technological Advancements: Continuous innovation in blockchain technology is crucial. New protocols, cross-chain interoperability, and improvements in user experience will make crypto more accessible and useful.
  3. i) Community Engagement: The decentralized nature of cryptocurrencies relies heavily on community involvement. Building strong, engaged communities around crypto projects can foster development, innovation, and long-term commitment
  4. k) Market Liquidity and Trading Volume: Liquidity plays a pivotal role in determining the price growth of cryptocurrencies. Higher liquidity and trading volumes not only reduce price manipulation but also attract institutional investors who require sizable liquidity to enter and exit positions without significantly impacting the market. 

Conclusion

The cryptocurrency market is still in its early stages of development, but it has the potential to become a major asset class in the future. To achieve sustained price growth, the market needs increased institutional adoption, improved regulation, greater utility, reduced volatility, education, and a more positive and welcoming community.