It’s been a tough ride for the crypto market until 2022. By November the market was down by 70 percent from the previous high at the end of November. When things were getting worse after 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 crypto market, especially Bitcoin has experienced many dips over the years. Every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in 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 more businesses and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. In the future, as more everyday people learn about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be more convenient for consumers to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, this makes it easier for consumers to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long haul, being patient and disciplined will be key.