It’s been a difficult journey for the cryptocurrency market through 2022. In November the market was down by 70% from its previous peak on November 20, 2021. And just when things were getting worse and down, the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it’s rebounded with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. In the future, as more people are educated about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses begin accepting crypto as a means of payment, this will make it easier for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long haul patience and discipline is crucial.