It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. And just when things were getting worse, 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 crypto market, especially Bitcoin, has seen its fair share of dips over the years. Every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. 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 previously, dips tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could lead to increasing participation in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more people learn about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to learn about and understand the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
meme to gloom overtakes crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this makes it easier for customers to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.