It’s been a difficult journey for the cryptocurrency market through 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned them even more dire. 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 its fair share of drops in the past. Each time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017 it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. In 2020, it broke 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. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased 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 beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to look at crypto as a potential 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.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to increase it will be more convenient for people to buy and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long-term, being patient and disciplined will be key.