It’s been a rough journey for the cryptocurrency market until 2022. As of November the market was down by 70 percent from its previous high in November 2021. And just when things were getting worse, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, 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
As we’ve seen previously, dips are typically followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
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 continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more people learn about crypto and the best ways to invest 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 continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the ability to facilitate 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.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for people to buy and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants start accepting crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which can increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re in it for the long run, being patient and disciplined will be key.