It’s been a rough journey for the cryptocurrency market in 2022. By November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them even 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 many dips over the years. Every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times 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 potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to higher prices.
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long-term patience and discipline will be key.