It’s been a tough ride for the crypto market in 2022. By November the market had dropped by 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash turned them even more dire. 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 had its fair share of dips over the years. And every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke that 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 at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run, which eventually surpasses 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 and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people learn about crypto and the best ways 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 crypto
As the crypto market is maturing, more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which can drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase it will be more convenient for individuals to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a means of payment, this will make it easier for people to utilize and store crypto, which could increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long haul patience and discipline is crucial.