It’s been a difficult experience for the crypto market until 2022. As of November the market was down by more than 70% from its previous peak at the end of November. And just when things were going downhill and down, the FTX crash made them look 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 experienced many dips over the years. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could result in increasing participation in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a method of payment. This could result in 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 beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase, it will become easier for individuals to purchase and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long haul, being patient and disciplined is essential.