It’s been a rough experience for the crypto market in 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash made them look worse. 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 many dips in the past. Every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had 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
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case could result in more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world 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 underlying technology behind 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 starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to learn about and understand it. As awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a form of payment, this will make it more convenient for consumers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long run, being patient and disciplined will be key.