It’s been a rough ride for the crypto market until 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash made them look 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 its fair share of drops in the past. Each time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after 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 typically followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This 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 recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people getting involved in the market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a means of payment, it will make it more convenient for customers to use and hold crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term patience and discipline will be key.