It’s been a rough journey for the cryptocurrency market until 2022. By November, the market had dipped by 70 percent from its previous high on November 20, 2021. When things were going downhill after the FTX crash made them look even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. And every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people being involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost 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 potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains 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 invest in the cryptocurrency market. With increasing numbers of people learn about crypto and how to invest 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 cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be 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 increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.