It’s been a difficult journey for the cryptocurrency market in 2022. By November, the market had dipped by 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash made them look even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
crypto payroll solutions
Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses begin accepting cryptocurrency as a method of payment, this makes it easier for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long-term, being patient and disciplined will be key.