It’s been a difficult experience 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 going downhill, the FTX crash turned them even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. 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, reaching a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to more people getting involved in the market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the 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 the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants accept crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long run Being patient and disciplined is essential.