It’s been a rough ride for the crypto market until 2022. As of November the market was down by 70% from its previous peak in November 2021. Just when the market was getting worse and down, the FTX crash turned them worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. 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
As we’ve seen before, fall-offs tend to be followed by a long bull run that finally breaks through the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance 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 crypto 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 demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily 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 starting to explore crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a means of payment, it makes it easier for customers to utilize and store crypto, which can increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long run Being patient and disciplined is crucial.