It’s been a difficult experience for the crypto market until 2022. As of 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 turned things more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
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, the potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created on top of 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 increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to explore 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 increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term patience and discipline is crucial.