It’s been a tough journey for the cryptocurrency market until 2022. By November, the market had dipped by 70% from its previous peak on November 20, 2021. When things were looking down and down, the FTX crash turned things even worse. What is the likelihood that the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Every time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Then, 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
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about and appreciate the concept. As understanding and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate 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 the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long run Being patient and disciplined will be key.