It’s been a tough experience for the crypto market in 2022. By November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was getting worse, 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 market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen 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
As we’ve seen before, fall-offs are usually followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people being involved in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Government regulations
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that can increase prices.
slippage tolerance crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept cryptocurrency as a method of payment, it will make it easier for consumers to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long-term Being patient and disciplined is crucial.