It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by 70 percent from the previous high at the end of November. And just when things were looking down and down, the FTX crash turned them even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. Each time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us 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 typically followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many 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 recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains 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 cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people purchasing and holding crypto, which can increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased 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 and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock is a fast-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 consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, it will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re in it for the long haul, being patient and disciplined is essential.