It’s been a difficult experience for the crypto market until 2022. By November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was getting worse, 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 market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. And every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each 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 lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen 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 taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in increasing participation in the market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for people to buy and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock is a fast-growing area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a means of payment, this will make it easier for consumers to utilize and store crypto, which could drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long haul patience and discipline is essential.