It’s been a tough experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash turned them even worse. What is the likelihood that 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 dips in the past. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy 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 in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about and appreciate it. As awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, 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 accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase it will be easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a means of payment, it will make it easier for customers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.