It’s been a difficult experience for the crypto market through 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. When things were going downhill after the FTX crash turned them even more dire. 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 experienced its fair share of dips over the years. Each time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually surpasses 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 more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people getting involved in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. As more and more people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that could increase prices.
crypto heist 150m trading platform bitmart
Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow it will be easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for customers to utilize and store crypto, which can increase demand and price.
Will crypto be on the 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 Being patient and disciplined is essential.