It’s been a difficult ride for the crypto market in 2022. As of November the market was down by 70 percent from its previous high in November 2021. Just when the market was going downhill and down, the FTX crash made them look even more dire. 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. Each time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017, it broke the 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 reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident in not just 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 adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market is maturing, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of 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 cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about 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 market for crypto is maturing, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting 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
Sovereign wealth funds, which are government-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a form of payment, it makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long haul Being patient and disciplined is essential.