It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market was down by more than 70% from its previous peak in November 2021. When things were going downhill and down, the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to higher prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased 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 even individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows it could result in more people purchasing and holding crypto, which can drive up prices.
everrise crypto price
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. 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
The number of crypto ATM’s increase it will be more convenient for consumers to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses accept cryptocurrency as a method of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long haul patience and discipline is crucial.