It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by 70 percent from the previous high in November 2021. When things were going downhill and down, the FTX crash made them look more dire. 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 experienced its fair share of drops in the past. Every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers accept cryptocurrency as a method of payment, it will make it easier for customers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long-term patience and discipline is essential.