It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse, 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 crypto market, especially Bitcoin has had its fair share of drops in the past. And every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run, which eventually breaks through the resistance created 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
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed upon blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to look at crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in 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 lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul Being patient and disciplined will be key.