It’s been a difficult journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were looking down and down, the FTX crash turned them worse. The question is, can 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. Each time, it has bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. 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
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in 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 adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services created upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in regular 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 starting to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of 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 that accept crypto continue to grow it will be more convenient for people to buy and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined will be key.