It’s been a tough ride for the crypto market through 2022. As of November the market was down by 70 percent from the previous high at the end of November. And just when things were going downhill, the FTX crash turned them more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen 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
As we’ve seen in the past, dips are usually followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to 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 applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to look at crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a means of payment, this makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long-term, being patient and disciplined will be key.