It’s been a tough experience for the crypto market in 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash made them look even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate 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 that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people become aware of crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature, more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be more convenient for people to buy and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting crypto as a form of payment, it makes it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long run patience and discipline is essential.