It’s been a rough experience for the crypto market in 2022. As of November the market was down by 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Each time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could result in more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring 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 at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and 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 starting to participate in the cryptocurrency market. In the future, as more people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, it will make it easier for people to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long-term patience and discipline is crucial.