It’s been a difficult ride for the crypto market through 2022. By November the market was down by 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash made them look 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 its fair share of dips in the past. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke the record and reached a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology 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 increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more people become aware of 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 is maturing, more and more people are starting to learn about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive 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 become easier for individuals to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long-term Being patient and disciplined is essential.