It’s been a rough journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. When things were looking down, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Each time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in 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 businesses and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and 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 individual investors are also beginning to invest in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like 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 higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting crypto as a means of payment, this will make it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long-term patience and discipline is essential.