It’s been a difficult experience for the crypto market in 2022. As of November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was going downhill after the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. Every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. 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 the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 usually followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in many ways. This growing demand could result in increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology, which 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 advances continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which could increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting 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.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to look at crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for people to buy and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long run, being patient and disciplined will be key.