It’s been a difficult ride for the crypto market in 2022. In November, the market had dipped by more than 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash made them look 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 seen its fair share of dips in the past. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in 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 better companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. As more and more people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can increase prices.
tribe crypto price
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi continues to grow 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 grows, more and more companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto 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
The number of crypto ATM’s continue to grow it will be easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, it will make it more convenient for customers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long run, being patient and disciplined is essential.