It’s been a difficult journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. When things were getting worse and down, the FTX crash turned things even more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Each time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017, it broke the record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people learn about 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 crypto market continues to mature as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
non profits that accept crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow, it will become easier for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses accept crypto as a form of payment, this will make it easier for customers to use and hold crypto, which could increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long haul patience and discipline will be key.