It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new record high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also 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 it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. This growing demand could result in more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to look at crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a means of payment, it will make it more convenient for people to utilize and store crypto, which can increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could have a rebound by 2023. For those in it for the long haul, being patient and disciplined is crucial.