It’s been a rough ride for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse after 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 had its fair share of dips in the past. Each time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses 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
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, it will make it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long run, being patient and disciplined is crucial.