It’s been a rough ride for the crypto market until 2022. In November the market was down by more than 70% from its previous peak at the end of November. Just when the market was getting worse after 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 seen many drops in the past. And every time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
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 as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are starting to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it makes it easier for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined will be key.