It’s been a tough experience for the crypto market until 2022. By November the market was down by more than 70% from its previous peak in November 2021. When things were looking down after the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. 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 over a year before reaching a bottom of $150. In 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to show interest in crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, this will make it easier for people to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined will be key.