It’s been a tough ride for the crypto market through 2022. In November the market was down by more than 70 percent from the previous high in November 2021. Just when the market was getting worse and down, the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Each time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that 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 the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
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 scalability and security, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by 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. As the global economic situation remains uncertain and uncertain, this could lead to 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 market for crypto. With increasing numbers of people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are starting to learn about and understand it. As awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to look at crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals 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 crypto ATM’s increase, it will become easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting cryptocurrency as a method of payment, this will make it easier for consumers to hold and use crypto, which can increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market could have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined will be key.