It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by 70% from its previous peak at the end of November. When things were getting worse and down, the FTX crash turned them 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 its fair share of dips over the years. Every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen another dip. But history shows 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 typically followed by a long bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi grows 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 market for crypto is growing, more and more companies are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses 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 that accept crypto continue to grow it will be more convenient for people to buy and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, this will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long haul patience and discipline will be key.