It’s been a rough journey for the cryptocurrency market until 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. And every time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in 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 the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. And this growing use case can lead to increasing participation in the market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
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 crypto assets will grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for people to buy and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined will be key.