It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. 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 experienced its fair share of drops in the past. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
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 increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of possible applications 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. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can raise prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it 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 accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, 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 haul patience and discipline is crucial.