It’s been a tough journey for the cryptocurrency market through 2022. In November the market was down by more than 70 percent from the previous high in November 2021. When things were getting worse, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Each time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to 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, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi grows 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 grows, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to show interest in crypto as an asset class. As more of these funds allocate a portion 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 quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for people to buy and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a means of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re committed to the long haul Being patient and disciplined will be key.