It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from the previous high on November 20, 2021. Just when the market was looking down after the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Each time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven 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 previously, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to explore crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase, it will become easier for individuals to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this 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 businesses accept crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline is crucial.