It’s been a rough journey for the cryptocurrency market through 2022. By November the market had dropped by more than 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash turned them more dire. 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 over the years. And every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run that finally overcomes the resistance set 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 made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like bitcoin and even 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
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can raise prices.
crypto mining rig frame
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept cryptocurrency as a method of payment, it will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long haul Being patient and disciplined is crucial.