It’s been a difficult experience for the crypto market through 2022. As of November the market was down by 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash turned things even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, 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
As we’ve seen in the past, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in increasing participation in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based 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 as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase, it will become easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that 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, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, it will make it more convenient for customers to use and hold crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long run Being patient and disciplined will be key.