It’s been a difficult journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Each 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 reaching a bottom of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. 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 before, fall-offs tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries embracing it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by 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. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
saitama crypto value
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from 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 funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run patience and discipline is essential.