It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. Just when the market was getting worse after the FTX crash turned them 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 many dips in the past. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown 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 are usually followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and could lead to greater prices.
As the crypto market grows, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, it could result in 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 be easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for people to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline will be key.