It’s been a tough ride for the crypto market until 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. When things were looking down and down, the FTX crash turned them even worse. 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 many dips in the past. Each time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. As more and more everyday people learn about crypto and how 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, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be a form of payment. This could result in 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 government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be easier for individuals to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this makes it easier for people 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 likely that the crypto market could have a rebound by 2023. For those in it for the long haul patience and discipline is crucial.