It’s been a difficult journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was getting worse, the FTX crash made them look even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. In 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. And just like that, we’ve had 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
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. And this growing use case could result in more people getting involved 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 seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and lead to higher prices.
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.