It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were looking down after the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could result in more people being involved in the market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw 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 potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, this will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long run, being patient and disciplined will be key.