It’s been a rough experience for the crypto market through 2022. By November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was looking down, the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in 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
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could drive up prices.
cumrocket crypto price prediction
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting using crypto to be a form 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 government-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses begin accepting cryptocurrency as a method of payment, it will make it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is essential.