It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. And every time, it’s 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 hitting a low of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in greater prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more merchants begin accepting crypto as a form of payment, this will make it more convenient for customers to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long-term Being patient and disciplined is crucial.