It’s been a tough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from its previous high at the end of November. And just when things were 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 had many dips over the years. Every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Then, 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
Just like we’ve seen before, fall-offs are usually followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for crypto. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could raise prices.
fido crypto service
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built using 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.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to look at crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for people to buy and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto rise in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. For those in it for the long run, being patient and disciplined will be key.