It’s been a rough experience for the crypto market until 2022. In November the market had dropped by 70 percent from its previous high on November 20, 2021. When things were going downhill after the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that finally breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to more people getting involved in the market which could boost prices.
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, many large institutions are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting 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 more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as stocks 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 result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a means of payment, this makes it easier for people to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline is essential.