It’s been a rough journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from its previous high in November 2021. When things were going downhill, the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries 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 and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto, it will lead to more people buying 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 that allows the provision of financial services developed on top of blockchain technology. As DeFi expands 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 market for crypto continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border 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 crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, this makes it easier for consumers to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline will be key.