It’s been a tough ride for the crypto market until 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke 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, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also 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 adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long haul, being patient and disciplined is essential.