It’s been a tough ride for the crypto market through 2022. By November the market had dropped by more than 70 percent from its previous high at the end of November. And just when things were going downhill, the FTX crash turned things worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in increasing participation in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. In the future, as more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for people to buy and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a means of payment, this will make it easier for customers to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.