It’s been a tough ride for the crypto market through 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was looking down, the FTX crash turned them 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 experienced many drops in the past. Every time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case can lead to more people being involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. As more and more people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants accept crypto as a means of payment, it will make it more convenient for consumers to use and hold crypto, which can increase demand and price.
So, will crypto rise in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re committed to the long run Being patient and disciplined is essential.