It’s been a rough experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from its previous high at the end of November. When things were going downhill and down, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. And every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. And 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
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more everyday people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can increase demand and price.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined is crucial.