Ah, the wild and woolly world of cryptocurrencies. It's a place where fortunes are made and lost faster than you can say "blockchain." The cryptocurrency market has taken quite the tumble from its late 2021 peak. Here's how some of the largest and most popular names in crypto have fared over the last year or two:

Token

Peak Price

Date of Peak

Percentage Decline From Peak

Bitcoin (BTC -1.25%)

$68,790

Nov. 10, 2021

68%

Ethereum (ETH 0.27%)

$4,892

Oct. 21, 2021

68%

Solana (SOL -3.05%)

$260

Nov. 6, 2021

92%

Dogecoin (DOGE -4.79%)

$0.74

May 8, 2021

90%

Shiba Inu (SHIB -4.48%)

$0.000088

Oct. 28, 2021

88%

Data from CoinMarketCap as of 10 a.m. ET on March 7, 2023.

Some of the reasons for these dramatic price drops varied from coin to coin, but they have a few headwinds in common. The cyclical nature of the crypto market results in broad ebbs and flows in value, and you could describe the current environment as a lengthy crypto winter. Furthermore, many investors have lost faith in crypto as a valid asset class due to the string of scandals and financial meltdowns in the sector in 2022.

But fear not, dear reader. I am convinced that digital currencies and blockchain networks will change financial systems on a global level over the next decade or so. As long as that long-term investment thesis holds water, I have a few ideas on what might push those swooning crypto prices into their next upswing.

1. Cryptocurrency regulations matter

Firstly, governments need to get some stronger regulations on the crypto business in place.

That may be a hard pill for many crypto fans to swallow, of course. You might be thinking that regulations kill innovation. They stifle the free market. They give more power to the government and leave less control in the hands of regular citizens. So more regulation has to be bad for the cryptocurrency market, which is built on the ideals of individual freedom, less government influence, and more financial innovation.

But hear me out. Things are different in these early days, and cryptocurrencies are in dire need of some responsibility and structure.

When it comes to cryptocurrencies, we're still dealing with a Wild West of an industry, with little oversight and plenty of dubious characters. Crypto investors have been learning this lesson the hard way through repeated money-draining events like the FTX bankruptcy, the Terra Luna disaster, and Kim Kardashian's crypto endorsement crackdown.

If the crypto community wants to attract deep-pocketed institutional investors, it needs to work within a legal and regulatory framework that is more investment-friendly. Say what you will about regulatory overreach or taxes, but proper regulations will allow institutional investors and others to confidently put their funds into this sector.

And what holder of tokens wouldn't want more big bucks flowing into the cryptocurrency market?

2. The rise of decentralized finance

Now, let's consider the rising interest in decentralized finance (DeFi) and Web3 applications. This is where the real magic will happen.

We're talking about a new paradigm in finance, one that is decentralized, trustless, and open to all. Layers of middlemen such as banks, insurance agents, and payment processors are about to be replaced by automated cryptocurrency systems. Fewer hands will reach into our pockets for a slice of every transaction. Money transfers will be faster, fees will shrink, and the financial system as a whole will soon be far more efficient. Who wouldn't love the idea of decentralized finance?

With the rise of DeFi platforms and applications, we're seeing the emergence of a new kind of financial ecosystem, one that is powered by the people, not the banks. And with more development in this area, we can expect to see some serious innovation and growth in the crypto market.

And in the end, the only legitimate reason for token prices to rise is a corresponding increase in demand for them. Blockchain and crypto ideas will soon wither and die if nobody wants a better financial ecosystem. However, I assume that the world is hungry for a new deal, which should have a positive effect on crypto prices in the long run.

3. The Bitcoin "halving" and other technology improvements

And last, but certainly not least, we have the unstoppable march of technological progress. Last year's big event was Ethereum's Merge. Next up is the fourth Bitcoin halving, scheduled for the spring of 2024. The number of Bitcoin that miners receive as their reward for validating transactions on the network will be cut in half (again), which sharply reduces the supply of new coins entering the market. In the past, that has tended to result in higher prices in the months that follow.

Take, for instance, the 2016 halving. That was followed by Bitcoin's 360% or so price surge from a modest $650 to nearly $3,000 in less than a year. Similarly, the 2020 halving preceded a price jump of around 520% from $9,000 to $56,000 in a year. There are no guarantees that the next halving will drive Bitcoin prices higher to that degree, but Bitcoin's price chart should take on a similar shape in 2024. History doesn't repeat itself, but it often rhymes.

And let's not forget about other technological improvements in other cryptocurrencies. We're talking about faster transactions, increased security, and more use cases. The Merge was just a stepping stone to further improvements for Ethereum. Solana is stabilizing its network structure. Shiba Inu is introducing the Shibarium network, boosting the cryptocurrency's transaction speed and data-crunching scalability. Even the frivolous Dogecoin community works with an ambitious list of platform improvements. You can teach an old dog new tricks, after all.

This category dovetails with the last one, as better technology simply helps these cryptocurrencies build better DeFi and Web3 systems. Higher crypto demand will follow, and then prices will go up. That's the deal, as long as I'm not completely wrong about cryptocurrencies holding the key to a better financial future.