It’s been a rough journey for the cryptocurrency market through 2022. In November the market was down by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned them even 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 seen many dips over the years. Every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
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 it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case can lead to increasing participation in the market which could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing, more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to look at crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto 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.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a means of payment, this makes it easier for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline will be key.