It’s been a difficult ride for the crypto market through 2022. By November the market was down by 70% from its previous peak at the end of November. And just when things were going downhill and down, the FTX crash turned them even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. Every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are starting to learn about and appreciate it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
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 are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it will make it easier for people to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long run, being patient and disciplined is essential.