It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was looking 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 crypto market, especially Bitcoin has had many drops in the past. Every time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in more people getting involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and result in more expensive prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. 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 and other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are beginning to learn about and appreciate it. As awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and higher prices.
Cryptocurrency is used for cross-border 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, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, this makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined will be key.