It’s been a difficult journey for the cryptocurrency market through 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven 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 previously, dips are typically followed by a long bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. 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.
Growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could increase prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more businesses accept crypto as a means of payment, it will make it more convenient for customers to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long run, being patient and disciplined is crucial.