It’s been a tough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them even worse. So, will 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. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record high of $68,000 in 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 are typically followed by a prolonged 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
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of 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 cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Crypto and blockchain technology 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 increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people become aware of crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined is essential.