It’s been a rough journey for the cryptocurrency market in 2022. In November the market was down by 70 percent from its previous high at the end of November. Just when the market was going downhill and down, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. And every time, it has bounced back with a big 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. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through that resistance and hit a new 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 there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world 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 underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
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 cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. With increasing numbers of people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a form of payment, this will make it easier for people to utilize and store crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are in it for the long haul patience and discipline will be key.