It’s been a tough experience for the crypto market until 2022. As of November the market had dropped by more than 70 percent from its previous high at the end of November. When things were looking down and down, the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017, it broke the record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck 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 following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case can lead to increasing participation in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher 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 invest in the cryptocurrency market. In the future, as more people are educated about 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 crypto market is maturing, more and more people are beginning to learn about and understand it. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for consumers to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers accept cryptocurrency as a method of payment, this makes it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run, being patient and disciplined will be key.