It’s been a difficult ride for the crypto market in 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was going downhill, the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw 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, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about and understand it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a means of payment, it will make it easier for people to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are in it for the long-term patience and discipline is crucial.