It’s been a rough journey for the cryptocurrency market through 2022. As of November the market had dropped by more than 70 percent from its previous high at the end of November. When things were looking down after the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, 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 witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could result in increasing participation in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
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 cryptocurrency market. In the future, as more people are educated 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 market for crypto grows as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows financial services to be created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of 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
With the amount of ATMs for crypto increase it will be easier for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it makes it easier for consumers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. For those committed to the long-term, being patient and disciplined will be key.