It’s been a tough ride for the crypto market in 2022. By November, the market had dipped by 70 percent from the previous high at the end of November. And just when things were getting worse and down, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows 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 previously, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is 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 even individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can increase prices.
pulse crypto price
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long haul Being patient and disciplined is crucial.