It’s been a tough journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were looking down after the FTX crash turned them 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 dips in the past. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us 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 before, fall-offs are typically followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and lead to greater prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make 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.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a form of payment, it will make it easier for consumers to utilize and store crypto, which could increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline will be key.