It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back with a big rise.
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. But, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate 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.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow, it will become easier for people to buy and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept cryptocurrency as a method of payment, it will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long run patience and discipline will be key.