It’s been a difficult experience for the crypto market until 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was going downhill and down, the FTX crash made them look worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the 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
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies 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 result in more people being involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. With increasing numbers of people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this could raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Use of crypto 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 are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase, it will become easier for people to buy and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long run Being patient and disciplined is crucial.