It’s been a rough ride for the crypto market through 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash made them look 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 its fair share of dips in the past. Each time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new high 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 high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows 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 before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
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 taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. As more and 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 market for crypto grows as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more 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.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to explore crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the 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.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow, it will become easier for people to buy and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, this will make it more convenient for people to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline is essential.