It’s been a tough ride for the crypto market in 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. When things were going downhill after the FTX crash made them look more dire. 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 had its fair share of dips in the past. Each time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. And this growing use case could result in more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and lead to greater prices.
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could raise prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for people to buy and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to 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 thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long haul patience and discipline is essential.