It’s been a tough journey for the cryptocurrency market until 2022. By November the market had dropped by more than 70% from its previous peak in November 2021. Just when the market was going downhill after the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded with a huge increase.
For instance, 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 the record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. 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 previously, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows, governments around 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 is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world is 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 crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. In the future, as more everyday people are educated about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
crypto trading nigeria
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are starting to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this will make it easier for people to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long-term, being patient and disciplined is crucial.