It’s been a tough experience for the crypto market through 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were looking down, the FTX crash turned them more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven 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 usually followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. And this growing use case can lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to explore cryptocurrency as a possible 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 increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it makes it easier for people to hold and use crypto, which can increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long haul, being patient and disciplined is essential.