While 2022 was a major stress test for the cryptocurrency market, recent data shows that Latin American traders continued to trade assets and currencies over the past year, as well as into early 2023. While this is good news for the crypto community, industry experts are advising traders, newbies and experienced alike, to reconsider their approaches to 2023 in order to benefit from a changing market.
“There is no doubt that the crypto market at the beginning of 2023 is very different from what we saw at the beginning of 2022.”, commented Tyler Roessel, public relations for Phemex. “But when you move away from the bombastic headlines, a more nuanced perspective emerges, especially when you look at Latin America regionally.”, he stressed.
Roessel notes that year-end data shows that the total global value of cryptocurrencies received in Latin America, between July 2021 and June 2022, grew by 40%not to mention that four countries in the region: Brazil, Argentina, Colombia and Ecuador are ranked among the top adopters of crypto assetsaccording to the latest Chainalysis Global Adoption Index study.
“The fascinating thing about Latin America is that the ups and downs of 2022 have not stopped. We see an incredibly strong trend towards crypto adoption on a large scale”, he explains, citing several important developments over the past year. “Brazil, the largest economy in the region, has launched its first stablecoin, the MBRL, and its Central Bank is developing its own digital currency to be tested in 2023 and launched in 2024, with the Central Bank of Colombia also following suit.”.
Roessel and other experts have pointed out how, Instead of restricting crypto mining and trading like in some European countries and China, US governments seek to incorporate and regulate digital assets in recognition of its usefulness in a continent responsible for some of the highest interest and inflation rates in the world.
“In Latin America, there is what we call ‘the crypto generation’, made up of traders who are not the ‘I want to get rich quick’ stereotype that newspapers like to write about.”, argues Roessel.
However, experts like Roessel continue to advise Latin American crypto investors to heed the lessons of 2022. He compares the last twelve months to a “stress test” that investors should incorporate when thinking about their strategies for the coming year.
For example, Roessel explains that the crypto market is currently more bearish than bullish, and traders should learn the differences when investing in these circumstances.. “Bear markets are known to produce fear, uncertainty and doubt, but an informed and cautious trader can still make big profits as long as they remain calm, read about bear market investing strategies like Dollar Cost Average (DCA – Dollar Cost Averaging) and focus on the long-term scenario”, he comments.
Roessel too suggests that traders should reassess the quality of the trading platform they useas part of a long-term strategy within what he calls “cryptographic fundamentals“.
“Just as fundamental analysis is the tool of choice for many traders to play long-term with more traditional assets, especially in the bear market, we consider it of singular importance look at three key areas when investing in crypto in 2023: the total macroeconomic market conditions, the components of a currency or token you are trading (its mechanisms, how much is in circulation, its volatility) and, of course, the exchange rate you are trading”, teaches Roessel.
Since the notorious FTX crash, caused in part by a combination of operational opacity, a lack of due diligence, and a lack of liquidity, crypto platforms have taken steps to reassure their clients that their investments are safe. However, some key tools have quickly become reliable metrics, such as the reserve test and the liquidity coverage ratio, and they are all worth your time, according to Roessel.
Finally, analyzing it through a purely positive bias, It is important to remember that investing is a two-way street and that an investor’s greatest investment is, after all, in himself..
“A person’s ability to apply knowledge, experience, analysis and evaluation will determine whether or not they will be successful next year, as well as every other year.”, Roessel concludes. “That’s why it’s so important to choose a community that values continuing education and invests in yourself. Because it means that whether you win one day or lose the next, you will always bounce back.”.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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