It’s been a tough journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned things worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it has bounced back with a huge increase.
For example, 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 that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set 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
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies 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 industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. 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
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. As more and more 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.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, it will lead to more people buying and holding crypto, which can raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a form 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
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses accept cryptocurrency as a method of payment, this makes it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long-term, being patient and disciplined is crucial.