It’s been a difficult experience for the crypto market until 2022. In November, the market had dipped by 70 percent from its previous high at the end of November. And just when things were looking down after 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 crypto market, especially Bitcoin has experienced many drops in the past. Each time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. And 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 in the past, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could lead to more people being involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, 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 by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could raise prices.
crypto consensus 2021
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be 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 owned by the state as investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this 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 and more people and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for individuals to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers start accepting crypto as a means of payment, it makes it easier for people to use and hold crypto, which could increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long haul, being patient and disciplined is crucial.