It’s been a rough journey for the cryptocurrency market until 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. When things were looking down, the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s 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 come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase it will be more convenient for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting crypto as a form of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long haul patience and discipline is essential.