It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that finally overcomes the resistance set by the previous high price. This pattern 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 recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people learn about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could increase prices.
energi crypto price
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for individuals to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a form of payment, it will make it easier for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long haul, being patient and disciplined is crucial.