It’s been a difficult ride for the crypto market until 2022. As of November, the market had dipped by 70 percent from the previous high on November 20, 2021. When things were looking down after the FTX crash made them look even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. And every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be easier for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.