It’s been a tough journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill after the FTX crash turned things worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen 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
Just like we’ve seen in the past, dips are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in 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 taking to it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
inxt crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for consumers to purchase and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for customers to hold and use crypto, which can drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is crucial.