It’s been a difficult experience for the crypto market through 2022. In November the market was down by 70 percent from its previous high in November 2021. And just when things were looking down and down, the FTX crash turned things 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 had its fair share of dips over the years. Every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record high of $68,000 in November 2021. 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
Just like we’ve seen previously, dips tend to be followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people become aware of crypto and the best ways to invest 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 increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that could drive up prices.
whitelist in crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it makes it easier for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long-term, being patient and disciplined will be key.