It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse, the FTX crash turned them 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 had many drops in the past. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. And this growing use case could lead to increasing participation in the market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this will make it more convenient for people to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long haul patience and discipline will be key.