It’s been a tough journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. When things were getting worse after the FTX crash turned them even 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. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had 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
Just like we’ve seen previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen 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 the last few years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the crypto market. As more and more everyday people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could increase prices.
what happens when crypto reaches max supply
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to 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 consumers to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, this makes it easier for consumers to use and hold crypto, which can increase demand and price.
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 cryptocurrency market will have a rebound by 2023. For those looking to invest for the long haul patience and discipline is essential.