It’s been a tough experience for the crypto market in 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were going downhill and down, the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. 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. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows 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 tend to be followed by a prolonged bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing increasing numbers of people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, 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 facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting cryptocurrency as a method of payment, it will make it easier for people to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. And for those who are committed to the long-term Being patient and disciplined is crucial.