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The crypto ecosystem continues to be the talk of the talk. With record-breaking growth rates as well as earth-shattering lows, it has been both a magical dream as well as the worst nightmare for investors. Since cryptocurrencies like Bitcoin became mainstream, they have continued to be in the news for their volatility.
In the last few years, especially during the pandemic, cryptocurrencies became the mainstay of many. They climbed to their highest ever valuations and led to the creation of multiple millionaires! The last few months have seen everything from Bitcoin to Ethereum come down. What is interesting is the fact that this going down is being seen as something positive!
In this article, we are going to explore stability in the cryptocurrency investing ecosystem. Specifically, we are going to look at factors that are making this a realistic possibility. If you are someone that has been waiting on the sidelines because of sharp upswings and rapid downslides, you should check out this article till the very end.
Stability on the Horizon? Five Factors Aiding Solidity
1. Coming of Institutional Investors
When it comes to Wall Street, volatility is a term that does go down well with their wealthy clientele. They are not in the business of losing millions of dollars in a single day. It is true that the advent of Wall Street in the crypto investing ecosystem is aiding stability.
With long-term steadfastness as far as crypto is concerned, Wall Street is playing a behind-the-background role in improving stability in this asset class. However, they still have a long way to go in this regard. The reliance on credible platforms like bitcode ai is increasing among investors.
2. Positive Government Regulations
For the longest time, governments over the world turned a blind eye to cryptocurrencies. When they started making money, the first attitude of the regulators was to come down hard. This resulted in a lot of backlashes from the investor community.
Countries like India that were on the brink of banning cryptocurrencies had to adopt a more conservative approach. This paved the way for positive regulations that worked towards improving investor confidence and protecting interests. This has boosted stability.
3. Dissociation with Negatives
If you have been reading the news, you would have read how speculations of cryptocurrencies being used for buying arms, financing terrorism, fueling the drug crisis, and more have been made. Thankfully, the crypto ecosystem has realized that this needs to be acted upon.
They have set up their own internal governing agencies and created a positive public opinion that cryptocurrencies are not associated with any vices. This positive PR has been instrumental in boosting the confidence of both investors as well as the government.
4. Onboarding of Financial Institutions
Investors in the crypto ecosystem have always been worried about how the money and dealings would happen. Earlier, traditional financial institutions were not keen on providing crypto services. Thankfully, that has changed with banks coming on board.
In most countries of the world, crypto services are being offered like any other banking service. This has given legitimacy to the entire discourse on the asset class. This has probably been one of the biggest things that have led to the stability of cryptocurrencies.
5. Access to Liquidity and Solutions
If there was one barrier that was preventing the entry of more investors, it was the fragmented nature of the crypto ecosystem. You had Crypto exchanges but they weren’t global in nature. If you wanted access to cryptocurrencies, you had to jump through hoops.
That is not the case anymore. You have start-ups that have assumed Unicorn status in different countries of the world. They have established a direct link with exchanges and have made access a possibility. The presence of established players is pushing stability in the industry.
The Market and Cryptocurrencies: How will it play out?
One thing is sure. Cryptocurrencies are here to stay. With verticals like NFTs, Blockchain, ETFs, and others gaining momentum, mainstream stability is expected in markets. The current reflection of Crypto and its valuation is a realistic assessment of the stability that has come in. This is the foundation on which the future of crypto assets is going to be built.
According to leading financial experts, this is a great time to start engaging with crypto. With prices bottoming, there is only one way where they would head- up! If you have any other questions on cryptocurrencies, please reach out to us in the comments section below. We will do our best to answer as many of your questions as possible.
