It’s been a tough journey for the cryptocurrency market through 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned things even more dire. 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 had its fair share of drops in the past. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. 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
As we’ve seen in the past, dips are usually followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in many ways. This growing demand can lead to more people being involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of 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 such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as increased 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 cryptocurrency market. As more and more 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 crypto
As the market for crypto continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
license for crypto exchange
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services developed using blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased 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, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow, it will become easier for people to buy and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for people to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. And for those who are committed to the long run, being patient and disciplined is essential.