It’s been a tough journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that finally overcomes the resistance set by the previous market’s highest 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 embracing it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in higher prices.
Government regulations
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like 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.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people become aware of crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants accept crypto as a form of payment, this makes it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long haul patience and discipline is crucial.