It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. And just when things were getting worse and down, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case can lead to more people getting involved in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Government regulations
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people learn about 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 continues to mature increasing numbers of people are beginning to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.