It’s been a rough experience for the crypto market until 2022. By November the market was down by more than 70 percent from the previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash made them look 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 many drops in the past. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the crypto 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 crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are 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 increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could raise prices.
spice crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long haul patience and discipline is crucial.