It’s been a tough experience for the crypto market in 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. When things were looking down after the FTX crash turned things more dire. 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 over the years. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had 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 are typically followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could lead to more people being involved in the market which could increase the price.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
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 cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more everyday people learn about crypto and the best ways 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 continues to mature, more and more people are beginning to learn about and understand it. As awareness and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can raise prices.
crypto exchange indonesia
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services built using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to increase, it will become easier for people to buy and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a form of payment, this will make it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are in it for the long run, being patient and disciplined is crucial.