It’s been a difficult experience for the crypto market through 2022. In November the market had dropped by 70% from its previous peak at the end of November. When things were going downhill and down, the FTX crash turned them more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses begin accepting crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long run Being patient and disciplined will be key.