It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70 percent from the previous high on November 20, 2021. When things were going downhill and down, the FTX crash turned them even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation 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 ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. With increasing numbers of everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could increase prices.
crypto startups 2022
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long haul Being patient and disciplined will be key.