It’s been a rough experience for the crypto market in 2022. By November the market had dropped by 70 percent from its previous high in November 2021. When things were getting worse, 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 market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase 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, also known as digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting crypto as a form of payment, it makes it easier for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long run patience and discipline is crucial.