It’s been a rough journey for the cryptocurrency market through 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. 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 crypto market, especially Bitcoin has experienced many dips in the past. And every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident not only in 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 better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
bison trails crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built on top of 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 crypto market grows increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline is crucial.