It’s been a tough ride for the crypto market in 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill after the FTX crash turned them 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 seen its fair share of dips in the past. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot 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 cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in 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 keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses accept crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long run, being patient and disciplined is crucial.