It’s been a difficult ride for the crypto market in 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was getting worse after the FTX crash made them look more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Every time, it’s bounced back with a big increase.
For example, 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 that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that following 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 tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident 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 the last few years. With more and better companies and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could lead to more people getting involved in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency 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, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be more convenient for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a form of payment, this will make it more convenient for consumers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long haul patience and discipline is crucial.