It’s been a tough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had 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
Just like we’ve seen before, fall-offs are typically followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more everyday people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased 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 increase, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul Being patient and disciplined is essential.