It’s been a tough ride for the crypto market until 2022. As of November the market was down by more than 70% from its previous peak in November 2021. Just when the market was looking down and down, the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back by a massive rally.
In 2013, for instance, 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 record highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could lead to more people getting involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. As more and more everyday people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The 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 appreciate it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to explore crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher prices for crypto.
More adoption by merchants
In the event that more retailers start accepting crypto as a means of payment, it will make it more convenient for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long-term, being patient and disciplined is crucial.