It’s been a difficult experience for the crypto market through 2022. In November the market had dropped by 70% from its previous peak at the end of November. And just when things were getting worse, the FTX crash turned them even more dire. 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 experienced its fair share of drops in the past. Each time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case could result in increasing participation in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains 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 people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and appreciate it. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more merchants accept crypto as a form of payment, this will make it more convenient for consumers to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long haul patience and discipline will be key.