It’s been a rough ride for the crypto market in 2022. In November the market had dropped by 70 percent from the previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned things worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. And every time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke that record and hit a record highest of $19,600. In 2018, the price was at $3,100. And in 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go 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. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a method 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 investments, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for people to buy and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long run Being patient and disciplined is crucial.