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 after the FTX crash turned them 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 many dips in the past. And every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. With increasing numbers of people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a means 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
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to look at crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. 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.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for people to buy and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses begin accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to use and hold crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re committed to the long run Being patient and disciplined will be key.