It’s been a tough experience for the crypto market until 2022. As of November the market was down by 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned things more dire. The question is, can 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 dips in the past. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen 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 tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could result in increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more everyday 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 market for crypto is maturing, more and more people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be more convenient for people to buy and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers start accepting cryptocurrency as a method of payment, this makes it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined is essential.