It’s been a tough journey for the cryptocurrency market until 2022. In November the market was down by 70 percent from the previous high at the end of November. Just when the market was going downhill 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 experienced many drops in the past. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could result in more people being involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. As more and more everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a form of payment. This could lead to an increase in the 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 investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto increase, it will become easier for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept cryptocurrency as a method of payment, it will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long haul Being patient and disciplined is essential.