It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. Just when the market was getting worse and down, the FTX crash turned them worse. So, will 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. Each time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. This growing demand can lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and lead to higher prices.
Government regulations
As the market for crypto grows, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the crypto market. In the future, as more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about and appreciate it. As awareness 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 a rapidly growing area of the crypto market that enables financial services to be built using blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for consumers to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which could increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long-term patience and discipline is crucial.