It’s been a difficult experience for the crypto market in 2022. As of November the market was down by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned things 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 in the past. And every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the 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 at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. And this growing use case could lead to more people being involved in the market which could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate 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 beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in increased 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, also known as individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency 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 continue to increase, it will become easier for people to buy and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long-term Being patient and disciplined is crucial.