It’s been a difficult experience for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were looking down after the FTX crash made them look 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 seen its fair share of drops in the past. Each time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could result in increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in higher prices.
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic as well as 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 is uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more 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 continues to mature increasing numbers of people are beginning to learn about and understand the concept. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
in say talks to crypto custody
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services created using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use 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 to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which could 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 like 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 consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long run, being patient and disciplined is essential.