It’s been a difficult journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70 percent from the previous high in November 2021. When things were looking down after the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke that record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw 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 beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
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 cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a form of payment, it will make it more convenient for customers to utilize and store crypto, which could drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long run Being patient and disciplined will be key.