It’s been a difficult experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from its previous high on November 20, 2021. When things were looking down after the FTX crash made them look even more dire. The question is, can 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 bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more people are educated 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 crypto market continues to mature, more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use 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
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a means of payment, it makes it easier for customers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long haul patience and discipline is essential.