It’s been a tough experience for the crypto market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. When things were going downhill, the FTX crash turned things even more dire. 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 seen many dips over the years. And every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could result in increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and lead to higher prices.
Government regulations
As the crypto market is maturing, 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 adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, this will make it more convenient for consumers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long run Being patient and disciplined is essential.