It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse 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 cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it’s bounced back by a massive increase.
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. However, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a method 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
These funds are state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like 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 can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a form of payment, this will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long run Being patient and disciplined is crucial.