It’s been a difficult experience for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash turned them 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 had many drops in the past. Every time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown 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 before, fall-offs tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could result in increasing participation in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies 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 industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
future crypto airdrops
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting using crypto to be 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 investments, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in 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 could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a means of payment, it makes it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long-term Being patient and disciplined is essential.