It’s been a difficult experience for the crypto market in 2022. In November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were looking down and down, the FTX crash made them look worse. 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 many dips over the years. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown 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 typically followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind 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 companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. As more and more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to explore crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase it will be more convenient for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline is essential.