It’s been a difficult experience for the crypto market in 2022. In November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were going downhill after the FTX crash made them look even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows 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 in the past, dips are typically followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries taking to 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 market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could increase prices.
best crypto apps canada
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the biggest 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 cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for consumers to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, this will make it more convenient for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.