It’s been a rough experience for the crypto market in 2022. By November the market had dropped by 70 percent from its previous high at the end of November. And just when things were going downhill and down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017, it broke the record and reached a new highest of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. And 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
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in increasing participation in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and lead to more expensive prices.
Government regulations
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. As more and more people are educated about 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 cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting cryptocurrency as a method of payment, this makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline is crucial.