It’s been a tough journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke 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 at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
crypto on fire
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, this makes it easier for people to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.