It’s been a rough experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. When things were looking down and down, the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. And every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each 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 that eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. This growing demand can lead to more people being involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people learn about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for people to buy and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, it will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will have a rebound by 2023. For those committed to the long-term patience and discipline is essential.