It’s been a rough ride for the crypto market in 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. When things were looking down after the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows us that following 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, which eventually breaks through 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 technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could lead to more people getting involved in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend it. As understanding and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept cryptocurrency as a method of payment, this will make it easier for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is crucial.