It’s been a rough ride for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw 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 just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This could 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 scalability and security, the potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday 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 beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will have a rebound by 2023. For those in it for the long haul Being patient and disciplined is essential.