It’s been a tough experience for the crypto market in 2022. As of November, the market had dipped by 70% from its previous peak 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 cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a huge rally.
In 2013, for instance, 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 highest of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven 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 in the past, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could result in increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in 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 crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are 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 created and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a means of payment, it will make it easier for people to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re committed to the long haul Being patient and disciplined is crucial.