It’s been a rough ride for the crypto market through 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. And just when things were looking down after the FTX crash turned things 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 many drops in the past. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. And 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
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest 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 made significant progress in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could result in more people getting involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of 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 crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created using blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants begin accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long run patience and discipline is crucial.