It’s been a rough journey for the cryptocurrency market in 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned them even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
alpha klima crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, it will make it more convenient for consumers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.