It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were going downhill, 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 cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in 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 beginning to investigate the potential of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be more convenient for people to buy and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept crypto as a form of payment, this makes it easier 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. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long-term Being patient and disciplined is essential.