It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned them even worse. 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 many dips in the past. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
cate crypto price
Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to look at crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, it will make it easier for people to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long run Being patient and disciplined is crucial.