It’s been a rough experience for the crypto market until 2022. By November the market was down by more than 70% from its previous peak in November 2021. When things were looking down, the FTX crash turned them even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. And every time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. This increased 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 continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
ide crypto
Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a means of payment, it will make it more convenient for people to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long run patience and discipline will be key.