It’s been a rough experience for the crypto market in 2022. By November the market was down by more than 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in 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 more companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market grows, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to 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 and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it easier for customers to use and hold crypto, which can drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. For those looking to invest for the long run Being patient and disciplined is essential.