It’s been a tough experience for the crypto market in 2022. In November the market was down by more than 70% from its previous peak in November 2021. Just when the market was going downhill and down, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. And every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more people learn 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 cryptocurrency
As the crypto market grows, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, 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 lead to increased demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.