It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was going downhill, the FTX crash turned them even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that after 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 long bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could raise prices.
crypto transaction monitoring rules
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long-term Being patient and disciplined is essential.