It’s been a tough journey for the cryptocurrency market in 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. Just when the market was going downhill, the FTX crash made them look 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 had many drops in the past. Each time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in increasing participation in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions 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. In the future, as more everyday 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.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could increase prices.
best penny crypto for long term
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services created using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for consumers to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, this will make it more convenient for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long run Being patient and disciplined is essential.