3 Reasons to Invest in Crypto in 2023 — and 1 Reason Not To

It’s no secret that the last year has been rough for crypto.

Bitcoin (BTC 9.13%) and Ethereum (ETH 6.26%) are both down roughly 70% from their peaks, and Cardano and Solana have plummeted by around 90%. Those numbers are tough to stomach, and many investors have fled the crypto market in recent months.

If you’re nervous about the market right now, you’re not alone. But should you keep investing? There are three reasons to stick with crypto in 2023, and one reason you’re better off avoiding it for now.

Why now could be a smart buying opportunity

1. Prices are at rock bottom

At its peak, Bitcoin cost nearly $70,000 per token, and Ethereum was priced at close to $5,000 per token. Today, Bitcoin stands at just under $21,000, with Ethereum at roughly $1,500.

If you’ve been looking for a more affordable time to invest in crypto, you may not get a better chance than right now. The crypto market is essentially on clearance at the moment, and it’s possible to load up on quality investments for a fraction of the price.

2. The upswing could be lucrative

Of course, nobody knows for certain whether the crypto market will recover. However, downturns like this aren’t necessarily uncommon in this industry, and major cryptocurrencies have faced worse in the past.

For example, back in 2018, Ethereum’s price fell by nearly 95% over the course of the year. If you had invested at its lowest point, you would have seen returns of nearly 4,500% over the following three years alone.

Ethereum Price Chart

Ethereum Price data by YCharts

Again, it’s unclear what the future holds for crypto, and we may not see another rally similar to the 2020-2021 surge. But even if cryptocurrencies don’t reach their all-time highs again anytime soon, even a relatively small upswing could still be lucrative if you invest at rock-bottom prices.

3. You might regret not investing

Crypto is a speculative investment, so nobody — even the experts — knows how it will fare over the long term. While it could fail, it could also change the world.

When you’re deciding whether to invest, consider which of these options you’d regret more: investing now and losing money if crypto fails, or not investing and missing out on the investment of a lifetime if crypto succeeds.

To be clear, this doesn’t mean you should go all-in and invest every dollar you have in crypto. As with any investment, it’s important to buy wisely and only invest what you can afford. But for some people, it’s worth risking a little money to avoid the regret of not taking this chance.

Why it may be best to avoid crypto

1. You’re a risk-averse investor

For all its potential, crypto also carries a significant amount of risk. At the moment, it’s impossible to know whether crypto will succeed, and there’s always a chance that you could lose whatever you invest. If money is tight, now may not be the best time to buy.

Also, this investment is notorious for its extreme volatility. Even in good times, it can experience nauseating ups and downs. Not all investors have the stomach for crypto, and that’s OK. If you know you’d lose sleep over that level of volatility, you might be better off sticking to stocks for now.

The future of crypto is uncertain, and whether you choose to invest now will depend largely on your risk tolerance and personal preferences. But if a rebound is on the way, right now may be one of the best chances to buy.

Katie Brockman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool has a disclosure policy.