It’s been a tough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from its previous high at the end of November. Just when the market was getting worse and down, the FTX crash turned things even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted 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. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown 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 previously, dips tend to be followed by a lengthy bull run that finally breaks through 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
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. With increasing numbers of people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be 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.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize 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 crypto ATM’s continue to increase it will be more convenient for individuals to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants start accepting crypto as a form of payment, it makes it easier for consumers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term, being patient and disciplined will be key.