It’s been a rough ride for the crypto market through 2022. By November the market was down by more than 70% from its previous peak in November 2021. And just when things were getting worse, 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 seen its fair share of dips over the years. Each time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could increase 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 grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a form of payment, this will make it easier for customers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long haul, being patient and disciplined is essential.