It’s been a rough experience for the crypto market until 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash made them look 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 experienced many drops in the past. Every time, it’s rebounded with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows 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 in the past, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From finance to gaming, crypto is being used in many ways. This growing demand can lead to more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could increase prices.
crypto marketing tools
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to explore crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for people to buy and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants accept cryptocurrency as a method of payment, this will make it more convenient for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long haul, being patient and disciplined is essential.