It’s been a tough journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. And just when things were getting worse after the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven 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 lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in increasing participation in the market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to develop 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 the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater 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 investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend it. As understanding and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term, being patient and disciplined is crucial.