What crypto lessons from 2022 can we learn for 2023?

In recent years, we have learned a lot from the past when it comes to cryptocurrency. In 2022, the crypto market has been quite bearish and the prices of the crypto coins have dropped significantly. As investors, we can learn from the events of 2022.

The industry is also working on new developments so that the crypto world can continue to grow. In this article, we look at the lessons learned from 2022 and how we can improve in 2023.

Balance in investment is important

We’ve all heard the clichés about how important balance is when trading crypto. You may have been too driven by emotions and therefore bought and sold at the wrong times. Finding balance as an investor is important and is a lesson that can certainly help you as we look ahead to 2023.

The crypto market is volatile, and that means the price can go in any direction. The market is currently more driven by sentiment than ratio analysis. It is therefore important to find a balance between market sentiment and the rationale behind investment. This can be done, for example, by using an investment strategy.

Bitcoin crypto cryptocoins cryptocurrency

Collecting the loss in crypto

If there’s one thing we’ve learned from the past two years, it’s that the crypto world can be hit hard. Many investors have experienced large losses for the first time, and the market has been turned upside down several times. Consider for yourself what is important and what the purpose of the investment is. If you believe in a project, sometimes it’s a good idea not to stress too much about it and see what the future holds. If you have real faith in the project, you will be more likely to make a good profit from it in the end.

In addition, all investors sometimes lose money. Again, balance is the magic word here. It is important to keep the number of winning trades greater than the number you lose. Experienced investors use rules of thumb (for example, the 2-6-20 rule dealing with the loss ratio) with which they manage their positions. Using a stop-loss or stop value also protects against large losses. In addition, it is of course important to avoid common mistakes.

Regulation of Crypto Worldwide

Many countries are making laws to make investing in digital currencies safer. Because criminals cannot easily steal large amounts of crypto and are subject to higher penalties, this will deter them more. The government is primarily interested in regulating various stablecoins.

If you look at Luna’s crash, you can see that it had a big impact on several stablecoins. Many investors have seen their entire portfolio disappear within days and have lost confidence in many cryptocurrencies. Other stablecoins have therefore chosen to freeze the withdrawal of the coins to avoid high costs for the transactions.

While a regulated market is good, as SBF recently proved, regulation will create uncertainty for investors in the near future. Because of all the developments around FTX, people are afraid of too strict regulations.

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Bitcoin (Image: Pexels / Karolina Grabowska)

The future of DeFi in crypto

If you’ve invested in crypto before, chances are you’ve heard of the term “DeFi.” The meaning of this is “decentralized finance” and is used for all alternative payment methods such as cryptocurrency and blockchain technology. DeFi uses smart contracts so that transactions can be made without the intervention of banks.

DeFi is a new way to keep your digital currency safe and transact. In this way, you are protected from criminals such as hackers. It is still early to fully trust DeFi at this point. It is precisely this uncertainty that put additional pressure on DeFi in the already declining crypto market. Still, it provides a good start for making secure transactions and storing your cryptocurrency.

The future of cryptocurrency will only become more secure as DeFi continues to evolve. Here, too, the lesson from 2022 is that we should not see this development as ‘quick money’, but as an opportunity for investment and innovation in the longer term.

Do you want to stay informed about the latest price developments?

You can always follow the development yourself with our WISH analyzes and overviews. Of course, you can also follow BTC and the live cryptocurrencies 24 hours a day if you want to stay informed in real time. Finally, you can practice investing in stocks and crypto without financial risks by creating a free account at virtualinvestment.com.

Please note: We never provide financial advice, so you cannot interpret our contribution in this way. Always do your own research and decide on rational grounds if, when, in what and how much you want to invest.

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What crypto lessons from 2022 can we learn for 2023?

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