It’s been a tough ride for the crypto market in 2022. By November the market was down by more than 70% from its previous peak in November 2021. Just when the market was going downhill and down, the FTX crash turned things more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming, crypto is being used in many ways. This growing demand can lead to more people getting involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
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, potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people become aware of 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 market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which could raise prices.
crypto firms brace
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the ability to make fast and cheap 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.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a means of payment, it will make it easier for people to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline is essential.