It’s been a rough experience for the crypto market until 2022. By November the market was down by more than 70% from its previous peak at the end of November. Just when the market was going downhill after the FTX crash turned things 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 its fair share of dips in the past. Each time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand can lead to more people being involved in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like gold and crypto. As the global economic situation is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions 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 crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
crypto exchange development company
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be created upon blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. 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.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a form of payment, it will make it easier for customers to hold and use crypto, which can increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long-term Being patient and disciplined will be key.