It’s been a rough ride for the crypto market until 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were going downhill after 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 market for crypto, particularly Bitcoin has had many drops in the past. And every time, it’s rebounded with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips 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 technology and cryptography have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
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 expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more everyday people learn about crypto and how to invest 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 is maturing, more and more people are starting to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that 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 built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a form of payment, this will make it more convenient for people to utilize and store crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long run, being patient and disciplined is crucial.