It’s been a rough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70% from its previous peak at the end of November. When things were looking down, the FTX crash turned things even 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. Every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could increase the price.
Increased institutional interest in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
convert crypto to fiat
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the 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 government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, this makes it easier for customers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long haul, being patient and disciplined is essential.