It’s been a rough ride for the crypto market through 2022. As of November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of 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 previously, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract 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 potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long run, being patient and disciplined is essential.