It’s been a rough journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from the previous high in November 2021. And just when things were going downhill, the FTX crash made them look 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 dips over the years. Each time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand could result in more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher 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, or even individual investors are also beginning to get involved in the cryptocurrency market. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
crowdfunding crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to explore crypto as an asset class. As more of these funds allocate a portion 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 cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase, it will become easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, it will make it easier for customers to utilize and store crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long run Being patient and disciplined is essential.