It’s been a rough journey for the cryptocurrency market until 2022. By November the market was down by more than 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash turned them 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 had its fair share of dips over the years. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 before, fall-offs are usually followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in more people getting involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which could raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to look at crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting 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, 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 committed to the long haul patience and discipline is crucial.