It’s been a tough experience for the crypto market in 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse after the FTX crash made them look even worse. So, will 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. Every time, it’s rebounded with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Then, 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. 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
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also 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 banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest 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 scalability and security, the potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. As more and more everyday people learn 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 crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to look at crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in 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 individuals to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it more convenient for people to use and hold crypto, which could increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined will be key.