It’s been a rough ride for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. When things were getting worse after the FTX crash turned things more dire. 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 seen its fair share of drops in the past. Every time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many 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 companies are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it easier for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined is crucial.