It’s been a difficult experience for the crypto market in 2022. As of November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was getting worse and down, the FTX crash made them look even 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 experienced many drops in the past. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after 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, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could result in more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow it will be easier for individuals to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers begin accepting crypto as a form of payment, this will make it more convenient for consumers to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long-term patience and discipline is essential.