It’s been a tough experience for the crypto market through 2022. As of November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was looking down and down, the FTX crash turned things 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 seen many dips in the past. And every time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
crypto ambassador
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be easier for people to buy and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are in it for the long run Being patient and disciplined is essential.