It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by more than 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen 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 in the past, dips are usually followed by a prolonged bull run that eventually breaks through 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
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a form of payment, it makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is essential.