It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70% from its previous peak in November 2021. When things were getting worse after the FTX crash made them look even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. Then, 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
As we’ve seen before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. In the future, as more everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent 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 lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a form of payment, it will make it more convenient for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.