It’s been a rough journey for the cryptocurrency market in 2022. By November the market had dropped by 70 percent from its previous high at the end of November. When things were looking down after the FTX crash turned them even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few 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 variety of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
crypto content marketing
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher prices for crypto.
More adoption by merchants
As more and more retailers begin accepting crypto as a means of payment, this makes it easier for consumers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long run patience and discipline is crucial.