It’s been a tough journey for the cryptocurrency market until 2022. As of November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned things 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 its fair share of dips in the past. Each time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us 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 usually followed by a lengthy bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. 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 which could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
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 expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that can raise prices.
hallowed spirit crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed using blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher prices for crypto.
More adoption by merchants
As more and more retailers accept crypto as a form of payment, it will make it easier for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long run, being patient and disciplined will be key.