It’s been a rough ride for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak in November 2021. And just when things were looking down, the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that finally surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw 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 potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. As more and more people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services built using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive 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
As the number of crypto ATM’s increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a form of payment, it will make it easier for customers to use and hold crypto, which can drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run Being patient and disciplined is essential.