It’s been a tough experience for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high at the end of November. When things were looking down and down, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run, which eventually surpasses 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
Crypto and blockchain technology have made significant progress in recent years. With more and better companies 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. And this growing use case could lead to increasing participation in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased 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, this will make it more convenient for customers to utilize and store crypto, which can increase demand and price.
So, will crypto rise in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.