It’s been a tough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were looking down, the FTX crash turned them more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke 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
Just like we’ve seen in the past, dips are usually 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 not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to higher prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
crypto cons
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for consumers to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses start accepting crypto as a form of payment, this makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. For those in it for the long haul patience and discipline is crucial.