It’s been a rough journey for the cryptocurrency market in 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse and down, the FTX crash turned things more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a big 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 reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions 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. As more and more people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
crypto coins to invest in 2018
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase it will be more convenient for people to buy and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a means of payment, this will make it easier for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long run Being patient and disciplined will be key.