It’s been a tough ride for the crypto market until 2022. As of November the market had dropped by more than 70 percent from its previous high at the end of November. Just when the market was going downhill and down, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally 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 progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed on top of 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 is growing, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.