It’s been a rough experience for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were looking down, the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it’s rebounded 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. However, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto can lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and understand the concept. As the awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned 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, it could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for people to buy and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined is essential.