It’s been a tough experience for the crypto market in 2022. In November the market was down by 70% from its previous peak in November 2021. And just when things were looking down and down, the FTX crash turned them more dire. 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 seen its fair share of dips over the years. Every time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. 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
Just like we’ve seen before, fall-offs are usually followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people are educated about crypto and how 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 grows increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals 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 crypto ATM’s continue to increase it will be easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this makes it easier for consumers to hold and use crypto, which can increase demand and price.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could have a rebound by 2023. And for those who are in it for the long-term Being patient and disciplined is crucial.