It’s been a difficult experience for the crypto market through 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. Just when the market was getting worse, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Each time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen 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
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm 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 expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors 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 crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance grows of crypto, this could lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
water mine crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased 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 fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. With these things to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.