It’s been a rough experience for the crypto market until 2022. By November the market had dropped by 70% from its previous peak on November 20, 2021. When things were getting worse, the FTX crash turned things 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 many drops in the past. And every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had 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
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
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 adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created using 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 crypto market grows, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase, it will become easier for people to buy and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it will make it more convenient for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined will be key.