It’s been a tough experience for the crypto market in 2022. In November the market was down by more than 70% from its previous peak in November 2021. And just when things were looking down and down, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
ach crypto forecast
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for people to buy and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a form of payment, it makes it easier for customers to hold and use crypto, which could increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined will be key.