It’s been a tough ride for the crypto market until 2022. By November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was getting worse and down, 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 cryptocurrency market, specifically Bitcoin has experienced many drops in the past. And every time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could result in more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, 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 for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and could lead to greater prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. As more and more everyday people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase, it will become easier for consumers to purchase and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined is crucial.