From mainstream cryptocurrencies like Bitcoin to tiny, niche coins, the cryptocurrency market is experiencing a tremendous boom. There are many reasons for this, including the forthcoming change in U.S. presidential administrations, but regardless of the exact origins, crypto investors are optimistic.
Does this crypto boom have the momentum to continue? And where does it go from there?
Keeping an Eye on the Crypto Market
No matter what, it’s prudent to keep an eye on the crypto market. In some ways, this task is getting easier, but in others, it’s getting harder. For example, there are tools that can help you find the current XRP price in USD, but if you don’t know how to look for this, you might not be able to easily find it. There are more cryptocurrencies than ever before and more variables to be on the lookout for. But there are also more tools and dashboards to help crypto investors make sense of things.
If you’re even marginally interested in crypto, keep reading headlines and set up a monitoring dashboard of your own so you can witness developments as they happen in real time.
Why the Boom?
There are multiple explanations for the current crypto boom.
- Changing administrations. Inarguably, the biggest factor responsible for the crypto boom is the coming change in presidential administrations. President-elect Trump has strongly signaled support for Bitcoin and the crypto market overall, and has plans to enact favorable policies for crypto investors. For at least the next four years, it seems that crypto will benefit from a supportive political environment.
- A long bear market. It’s also possible that this surge in growth has partially stemmed from a lengthy bear market in the crypto world. After a long hibernation, if you’ll forgive the pun, crypto investors have found reason for hope and optimism.
- Digitization. Increasingly, assets and transactions are going digital. This was already the status quo momentum more than a decade ago, but the pace has hastened in recent years. As cash becomes less popular and practically everything in the world goes digital, digital currencies only make sense.
- AI and other developments. Investors may also be optimistic about the future of cryptocurrency due to astounding technological advances in the world of AI. While AI and blockchain technologies are fundamentally distinct, the breakthroughs in AI naturally lead to optimism about future breakthroughs in cryptocurrency.
Reasons for Optimism
There are several reasons why crypto investors deserve to be optimistic about continued growth in the future.
- Political changes and attitudes. It seems as though the Trump administration plans to make good on its promises to support crypto. If this momentum continues, it could spark a change to the Overton window – and greater favorability to crypto on both sides of the aisle.
- Sustaining growth. Remember that Bitcoin has been around since 2009. It may seem like a new phenomenon, but it now has more than 15 years of history. It’s no longer possible to argue that crypto is a simple fleeting trend, and investors have far more data to work with than ever before.
- Technological breakthroughs. Our current generation of cryptocurrencies is perfectly adequate, but the next generation might be even better. Blockchain developers are constantly working and researching to make improvements to this technology, potentially leading to an even better version of digital currency.
- Increasing acceptance and adoption. With all the talk about crypto markets and with businesses accepting crypto with greater reliability, people everywhere are beginning to accept and adopt crypto in greater numbers. As long as this momentum continues, the price of digital currencies will only increase, potentially offering substantial returns, especially when considering the latest USD to SOL exchange rate, which reflects the dynamic and promising nature of the Solana ecosystem.
- Central banking issues. One of the biggest reasons people favor crypto is because it’s insulated from central banks and centralized manipulation. With questionable central banking decisions from the last few years, investors have even more reason to double down on crypto.
Reasons for Pessimism
That said, there are also some reasons to be pessimistic about whether this growth is sustainable.
- “Priced in” value. There’s no question that crypto is going to become more accepted, both politically and publicly, in the coming years. However, this might already be priced in. In other words, the expected value of crypto in the future is already built into the price, so the price may not increase further when that value arrives.
- Volatile markets. Cryptocurrency markets are notoriously volatile, even in favorable situations. Even a relatively minor piece of bad news could be enough to disrupt this momentum and send markets plunging.
- A cacophony of coins. It’s estimated that there are 13,217 cryptocurrencies in existence, with nearly 9,000 currencies live and active. Accordingly, it’s hard to tell which currencies will be most important in the years to come.
So, is the crypto boom going to continue? The short answer is probably yes, at least in the short term. However, once you start looking beyond the next few months, things get more uncertain; there’s just too much we don’t know.