It’s been a tough journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash made them look 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 experienced many drops in the past. Every time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high 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 there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could result in more people getting involved in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more everyday people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a means 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
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses accept crypto as a form of payment, this will make it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long-term patience and discipline will be key.