It’s been a tough experience for the crypto market until 2022. As of November the market had dropped by more than 70 percent from its previous high on November 20, 2021. When things were looking down, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many 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 fell for over a year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every 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 long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could lead to increasing participation in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications 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 utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and understand it. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. But with these factors in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long-term patience and discipline is essential.