It’s been a tough ride for the crypto market until 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash made them look more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Every time, it’s bounced back with a huge rally.
In 2013, for instance, 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 record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in 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 more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to increasing participation in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. In the future, as more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about and understand the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands and more projects and platforms 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 grows as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase, it will become easier for people to buy and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this will make it easier for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long haul patience and discipline is essential.