It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak in November 2021. Just when the market was going downhill and down, 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 crypto market, especially Bitcoin, has seen many dips in the past. Every time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also 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 companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. This growing demand could result in more people being involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in higher prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as more expensive 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 invest in the cryptocurrency market. With increasing numbers of 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 crypto market continues to mature increasing numbers of people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could drive up prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services built on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long run patience and discipline will be key.