It’s been a rough experience for the crypto market in 2022. In November the market was down by 70% from its previous peak on November 20, 2021. And just when things were looking down and down, the FTX crash made them look even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And 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 previously, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
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 embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are 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 increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, it will make it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long run patience and discipline is crucial.