It’s been a rough experience for the crypto market until 2022. In November the market was down by more than 70 percent from its previous high at the end of November. Just when the market was going downhill and down, the FTX crash turned things 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 its fair share of dips in the past. And every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had 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
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. This growing demand could result in more people being involved in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains 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 ones showing interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants accept cryptocurrency as a method of payment, this will make it more convenient for customers to hold and use crypto, which can drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run Being patient and disciplined will be key.