It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by 70 percent from its previous high at the end of November. When things were going downhill, the FTX crash turned them 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 many drops in the past. And every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke that record and hit a record high of $19,600. In 2018, the price was at $3,100. In 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. This growing demand could result in more people getting involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are starting to create 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 possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors many investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved 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 more 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 it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept cryptocurrency as a method of payment, this will make it easier for consumers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined will be key.