It’s been a tough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. When things were looking down after the FTX crash turned things more dire. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. Each time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is rising. 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 boost prices.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
As the crypto market grows 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 adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. As the global economic situation is uncertain and 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 one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. As more and more people learn about crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto 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 result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline will be key.