It’s been a tough journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
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 not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could lead to more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, this makes it easier for consumers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long haul Being patient and disciplined is essential.