It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was looking down, the FTX crash made them look worse. 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 many dips over the years. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market which could boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market grows, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains 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 crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As the awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this could raise prices.
reimagined finance crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to look at crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher 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 cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, this will make it more convenient for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market will see a recovery in 2023. For those in it for the long run patience and discipline is crucial.