It’s been a difficult ride for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were getting worse and down, 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 experienced its fair share of drops in the past. Each time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest 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 before, fall-offs tend to be followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
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 the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market which could boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more people are educated 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 grows increasing numbers of people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, it makes it easier for people to hold and use crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long haul, being patient and disciplined is essential.