It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, it makes it easier for people to utilize and store crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long run patience and discipline is essential.