It’s been a tough ride for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was looking down after the FTX crash made them look even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential 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 is maturing, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning 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 adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. As more and more people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to look at crypto as a potential 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 higher 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 crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, it will make it easier for people to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long-term Being patient and disciplined is essential.