It’s been a difficult experience for the crypto market in 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were looking down after the FTX crash made them look even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. 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
Just like we’ve seen previously, dips are usually followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the crypto market. As more and more people become aware of 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 cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses accept crypto as a means of payment, this will make it more convenient for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is essential.