It’s been a rough ride for the crypto market through 2022. In November the market had dropped by 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash made them look 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 had many dips over the years. Every time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. And this growing use case could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
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 crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and understand the concept. As understanding and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
loot crypto price
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate fast and cheap 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.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be easier for consumers to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it easier for consumers to use and hold 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 in mind, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long run Being patient and disciplined is essential.