It’s been a difficult ride for the crypto market through 2022. As of November the market was down by more than 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized 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.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies 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.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, it will make it easier for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long haul patience and discipline will be key.