It’s been a tough journey for the cryptocurrency market in 2022. By November the market had dropped by 70 percent from its previous high on November 20, 2021. And just when things were going downhill and down, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing 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 crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend it. As understanding and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
crypto tower
Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long run, being patient and disciplined is essential.