It’s been a tough ride for the crypto market through 2022. By November, the market had dipped by 70% from its previous peak at the end of November. Just when the market was going downhill, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. And every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
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 that finally overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could result in more people being involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people are educated about crypto and the best ways to invest 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 as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
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 segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers accept crypto as a means of payment, this makes it easier for consumers to utilize and store crypto, which can increase demand and price.
So, will crypto rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined is essential.