It’s been a difficult ride for the crypto market through 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash turned them more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. And every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could lead to increasing participation in the market which could increase the price.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains 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 one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in more 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 it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that can increase prices.
crypto and forex
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers accept cryptocurrency as a method of payment, it makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline is essential.