It’s been a difficult experience for the crypto market through 2022. By November the market was down by 70% from its previous peak at the end of November. When things were getting worse 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 drops in the past. Each time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications 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 benefit from blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people are educated about crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a means of payment, it will make it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long run, being patient and disciplined will be key.