It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were going downhill, the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Every time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance and hit 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 after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows, more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits 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, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this makes it easier for people to use and hold crypto, which can drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long haul patience and discipline is crucial.