It’s been a rough journey for the cryptocurrency market through 2022. By November the market was down by 70% from its previous peak in November 2021. Just when the market was going downhill and down, the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. 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, reaching a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. 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 tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to increasing participation in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
what is spread in crypto trading
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and more expensive 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 means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be more convenient for people to buy and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, it makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long run Being patient and disciplined is essential.