It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Each time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017, it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. 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
Just like we’ve seen previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could result in increasing participation in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate 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 crypto. Retail investors, or individual investors are also beginning to participate in the crypto market. With increasing numbers of everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are starting to learn about and understand it. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which could increase prices.
crypto volume monitor
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers start accepting crypto as a form of payment, it will make it more convenient for customers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long haul, being patient and disciplined is essential.