It’s been a rough journey for the cryptocurrency market in 2022. As of November the market was down by 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. And every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to increasing participation in the market which could boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go 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. This could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can raise prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for people to buy and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers accept cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which can increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.