It’s been a difficult ride for the crypto market through 2022. As of November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned them worse. The question is, can 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 in the past. Every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. And 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
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people getting involved in the crypto market which could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains 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 beginning to invest in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for people to buy and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers accept crypto as a means of payment, this will make it easier for people to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run patience and discipline will be key.