It’s been a rough experience for the crypto market until 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
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 growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use 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 ATMs for crypto continue to increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will have a rebound by 2023. If you’re committed to the long run, being patient and disciplined will be key.