It’s been a difficult journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70% from its previous peak at the end of November. And just when things were getting worse, the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it’s rebounded with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this will make it more convenient for customers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re committed to the long run, being patient and disciplined will be key.