It’s been a rough ride for the crypto market through 2022. In November the market was down by 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record and hit a record high of $19,600. 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. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just 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 businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to more people being involved in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are now beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for people to buy and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting crypto as a means of payment, this makes it easier for customers to use and hold crypto, which could increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long haul, being patient and disciplined is essential.