It’s been a rough ride for the crypto market through 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were going downhill 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 many dips in the past. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown 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 before, fall-offs 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 in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people learn 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 crypto market continues to mature, more and more people are starting to learn about and understand it. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
bluzelle crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a means 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 instruments for investing, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto 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 costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, it will make it easier for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will have a rebound by 2023. For those looking to invest for the long haul patience and discipline is crucial.