It’s been a rough experience for the crypto market in 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. And just when things were looking down, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Each time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, 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. And just like that, we’ve had 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
As we’ve seen previously, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased 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 is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday 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 cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive 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 costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, it makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long haul Being patient and disciplined will be key.