It’s been a rough ride for the crypto market until 2022. As of November the market was down by 70 percent from the previous high at the end of November. When things were getting worse and down, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke that record and hit a record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke 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. But history shows us that after 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 lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could result in increasing participation in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in greater prices.
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
The development of crypto 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 lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the capability to perform fast and cheap 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 ATMs for crypto continue to increase, it will become easier for people to buy and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re committed to the long run Being patient and disciplined is essential.