It’s been a difficult experience for the crypto market in 2022. In November the market was down by more than 70% from its previous peak on November 20, 2021. When things were looking down, the FTX crash turned things even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us 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 typically followed by a prolonged bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people being involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and result in higher prices.
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range 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 benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about 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 cryptocurrency
As the market for crypto continues to mature increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created using blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants accept crypto as a form of payment, it makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline is essential.