It’s been a difficult journey for the cryptocurrency market until 2022. In November the market was down by more than 70% from its previous peak at the end of November. Just when the market was looking down after the FTX crash turned them even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. And every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. Then, 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 previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people being involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. 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
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning 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 lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for individuals to purchase and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is essential.