It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill, the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us 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 before, fall-offs are usually followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built 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 continues to grow, more and more companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, this will make it more convenient for customers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined is essential.