It’s been a difficult experience for the crypto market until 2022. As of November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were looking down and down, the FTX crash made them look even more dire. The question is, can 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’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven 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 previously, dips are usually followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern 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 recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
crypto arbitrage trading bots
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as 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 owned by the state as investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow, it will become easier for individuals to purchase and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this will make it easier for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long haul patience and discipline will be key.