It’s been a tough journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, 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 seen its fair share of drops in the past. Every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run that finally surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as increased 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 starting to invest in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are starting to learn about and appreciate the concept. As the awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for individuals to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting crypto as a means of payment, this will make it more convenient for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long-term Being patient and disciplined is essential.