It’s been a rough experience for the crypto market until 2022. As of November the market had dropped by 70% from its previous peak in November 2021. When things were getting worse and down, the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. And every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
stronger price crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are now beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this makes it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long run, being patient and disciplined is essential.