It’s been a rough experience for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high in November 2021. And just when things were going downhill after the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. 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 before, fall-offs are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also 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 better companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could result in increasing participation in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions 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 lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains 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, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a form 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 state-owned investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses accept crypto as a means of payment, it will make it easier for customers to utilize and store crypto, which could increase demand and price.
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. For those committed to the long-term Being patient and disciplined will be key.