It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. Just when the market was getting worse, the FTX crash turned them even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. And every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows 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 lengthy bull run that eventually breaks through the resistance created 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 come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe 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 underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could result in 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 factors, more and more investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for individuals to purchase and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long run patience and discipline is crucial.