It’s been a tough journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were looking down after the FTX crash made them look more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017 it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and more expensive 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 beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run, being patient and disciplined is essential.