It’s been a difficult ride for the crypto market until 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned them 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 in the past. Every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. This growing demand could lead to increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Government regulations
As the crypto market is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services built using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for people to buy and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long-term, being patient and disciplined is crucial.