It’s been a tough ride for the crypto market through 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them 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 had its fair share of dips in the past. Each time, it’s rebounded with a big increase.
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. In 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people are educated 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 continues to mature, more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could raise prices.
coins earth gloom overtakes crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services created using blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more merchants accept crypto as a form of payment, this will make it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those in it for the long-term patience and discipline will be key.