It’s been a rough ride for the crypto market through 2022. By November the market was down by 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. Each time, it’s rebounded with a huge rise.
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. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us 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 before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. 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 people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses 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
The number of crypto ATM’s increase, it will become easier for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long run, being patient and disciplined will be key.