It’s been a tough experience for the crypto market until 2022. By November the market was down by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash made them look more dire. 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 experienced many dips in the past. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that after 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 long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have 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 market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. As more and more people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built using blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, it makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. For those committed to the long run patience and discipline will be key.