It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things even more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Each time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record and hit a record high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through 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 after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are starting to create 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 underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more everyday 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 grows increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
defi vs cefi crypto
Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed using 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 crypto market continues to grow, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a form of payment, it makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could have a rebound by 2023. For those in it for the long run Being patient and disciplined will be key.