It’s been a difficult experience for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high on November 20, 2021. When things were getting worse after the FTX crash turned them even 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 its fair share of drops in the past. Each time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could lead to increasing participation in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent years 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 in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are starting to learn about and understand it. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a form of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will see a recovery in 2023. For those committed to the long run, being patient and disciplined is essential.