It’s been a tough journey for the cryptocurrency market in 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. And every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a prolonged 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 progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in 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 increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could drive up prices.
crypto community manager
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, it makes it easier for people to use and hold crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined is crucial.