It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high in November 2021. When things were getting worse after the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s rebounded with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
As the crypto market grows and mature, governments across the globe 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.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to become aware about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Utilization of crypto to make 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 begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold crypto, which could increase demand and price.
So, will crypto grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul, being patient and disciplined will be key.