It’s been a rough ride for the crypto market until 2022. As of November the market was down by more than 70 percent from its previous high on November 20, 2021. 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 market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Each time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, increase the price.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are starting to learn about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that could increase prices.
what is runway in crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the 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 owned by the state as investments, are now beginning to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be easier for consumers to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more businesses accept cryptocurrency as a method of payment, this makes it easier for consumers to utilize and store crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long haul patience and discipline will be key.