It’s been a difficult experience for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak at the end of November. When things were looking down and down, 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 market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually 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 not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand can lead to increasing participation in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long run patience and discipline will be key.