It’s been a tough experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash turned them worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Each time, it has bounced back by a massive rally.
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 reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Then, 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
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen not only in 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 businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to more people getting involved in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. As more and more 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.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a method 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
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. With these things in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long-term Being patient and disciplined will be key.