It’s been a difficult ride for the crypto market in 2022. By November the market had dropped by 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Each time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are now beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or 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. As more security tokens are issued and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long haul Being patient and disciplined is essential.