It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. When things were getting worse after the FTX crash turned things 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 seen its fair share of dips in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows us that following 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 that eventually overcomes the resistance set by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From finance to gaming, crypto is being used in many ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature, more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to look at crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its capability to perform 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
As the number of crypto ATM’s continue to grow it will be easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, it makes it easier for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long haul Being patient and disciplined is crucial.