It’s been a rough journey for the cryptocurrency market in 2022. In November the market was down by more than 70% from its previous peak in November 2021. And just 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 its fair share of dips over the years. And every time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017, it broke the record, and hit a new high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and result in greater prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
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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 grows and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase, it will become easier for people to buy and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a form of payment, this will make it easier for customers to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.