It’s been a tough journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was getting worse after the FTX crash turned things worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This is evident in more than 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 better companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
eos crypto future
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for people to buy and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, this will make it easier for customers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long haul, being patient and disciplined is essential.