It’s been a rough ride for the crypto market in 2022. In November the market was down by 70 percent from its previous high at the end of November. And just when things were looking down and down, the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Each time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than 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 better companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people being involved in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases beyond just 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 increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could increase demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency 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.
As the number of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a form of payment, it will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long-term patience and discipline is crucial.