It’s been a rough journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Every time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017, it broke that record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. 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
Just like we’ve seen before, fall-offs are typically followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go 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 stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more everyday people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to explore crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a means of payment, it will make it easier for people to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline is essential.