It’s been a rough experience for the crypto market until 2022. As of November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse, 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 its fair share of dips over the years. Every time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. Then, 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 in the past, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and hold crypto, which could 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 real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers accept crypto as a means of payment, this will make it more convenient for people to utilize and store crypto, which could drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. With these things being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline will be key.