It’s been a tough experience for the crypto market in 2022. As of November the market was down by more than 70 percent from its previous high at the end of November. When things were looking down after the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. And every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of 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 drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how 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 increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, it makes it easier for customers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long haul patience and discipline is essential.