It’s been a difficult journey for the cryptocurrency market in 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 going downhill after the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could lead to increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can raise prices.
south african crypto exchange
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals 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.
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined will be key.