It’s been a rough journey for the cryptocurrency market through 2022. As of November the market had dropped by 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash turned them more dire. 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 drops in the past. And every time, it’s rebounded with a huge rise.
For example, 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 hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could drive up prices.
wax crypto wallet
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use 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 ATMs that accept crypto continue to grow, it will become easier for people to buy and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, it will make it easier for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline will be key.