It’s been a tough journey for the cryptocurrency market through 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. When things were going downhill and down, the FTX crash turned them 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 experienced many dips over the years. And every time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also 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 taking to the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can drive up prices.
banks that are crypto friendly
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, this makes it easier for customers to hold and use crypto, which can increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long run patience and discipline will be key.