It’s been a difficult experience for the crypto market in 2022. As of November the market was down by 70 percent from its previous high at the end of November. When things were looking down after the FTX crash turned things even more dire. 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 over the years. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, history has shown us 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 tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people getting involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can increase prices.
crypto token economics
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive 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.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long haul Being patient and disciplined is essential.