It’s been a rough ride for the crypto market through 2022. In November the market had dropped by 70 percent from the previous high at the end of November. And just when things were getting worse after the FTX crash made them look even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen 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
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run, which eventually surpasses 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 technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
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, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this could increase prices.
spung space crypto
Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, it will make it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long run Being patient and disciplined is essential.