It’s been a rough ride for the crypto market until 2022. In November, the market had dipped by more than 70% from its previous peak in November 2021. When things were looking down, the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. Every time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. 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 before, fall-offs tend to be followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
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 adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases 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 will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
crypto compound calculator
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more 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 higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for consumers to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, it makes it easier for people to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long-term Being patient and disciplined will be key.