It’s been a rough journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. When things were looking down, the FTX crash turned things more dire. 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 dips over the years. And every time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in 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
Just like we’ve seen previously, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest 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 progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could result in more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as 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 market for crypto. In the future, as more people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about it and comprehend it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
The Decentralized Finance (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 expands and more platforms and projects 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 grows increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, this will make it easier for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline is crucial.