It’s been a difficult journey for the cryptocurrency market in 2022. By November, the market had dipped by 70% from its previous peak in November 2021. When things were looking down, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through that resistance and reached a new high of $68,000 in 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
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could result in more people being involved in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are starting to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, it will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. And for those who are committed to the long-term patience and discipline will be key.