It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by 70 percent from the previous high in November 2021. When things were getting worse and down, the FTX crash made them look even worse. 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 its fair share of drops in the past. And every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that finally overcomes the resistance set 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 and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for people to buy and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a form of payment, it will make it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those committed to the long-term Being patient and disciplined will be key.