It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were getting worse and down, 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 market for crypto, particularly Bitcoin has had its fair share of dips over the years. And every time, it’s rebounded by a massive 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. However, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that after 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 that finally surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to increasing participation in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
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 lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the crypto market. As more and more people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The 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 it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, this makes it easier for customers to utilize and store crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long run, being patient and disciplined is essential.