It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were looking down and down, 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 experienced many drops in the past. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. 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 previously, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
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 investments like gold and crypto. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use 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 continue to increase, it will become easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, this will make it easier for people to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline will be key.