It’s been a rough experience for the crypto market through 2022. In November the market was down by 70% from its previous peak on November 20, 2021. When things were looking down and down, the FTX crash turned them 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 drops in the past. Every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck that 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 after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could lead to increasing participation in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and result in more expensive prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in 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 participate in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a form of payment, it will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long run, being patient and disciplined will be key.