It’s been a difficult journey for the cryptocurrency market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. When things were getting worse after the FTX crash turned them 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. And every time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell 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. Then, in 2018, it was trading at $3,100. In 2020, it broke that resistance and hit 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
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more everyday people are educated about crypto and how 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 crypto market is maturing, more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a means of payment, it will make it more convenient for customers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long haul patience and discipline is essential.