It’s been a difficult journey for the cryptocurrency market until 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were going downhill and down, the FTX crash turned things even 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 had many dips over the years. Each time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically 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 cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto 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 the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be easier for consumers to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants start accepting crypto as a form of payment, it makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long-term patience and discipline will be key.