It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned things worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Each time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017 it broke that record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, this makes it easier for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long-term Being patient and disciplined will be key.