It’s been a tough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned things worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. Every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally breaks through the resistance created 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 progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people being involved in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent times 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 possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and result in higher prices.
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could result in more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains 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 people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to look at crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.