It’s been a rough experience for the crypto market through 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill after the FTX crash made them look even 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 seen many dips over the years. Every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and lead to greater prices.
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. In the future, as more people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses 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.
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
As more and more retailers accept cryptocurrency as a method of payment, it will make it easier for customers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term Being patient and disciplined will be key.