It’s been a rough ride for the crypto market in 2022. By November the market had dropped by more than 70 percent from its previous high on November 20, 2021. And just when things were going downhill 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 cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to more people buying and holding crypto, which could increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built using blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, it makes it easier for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is essential.