It’s been a rough ride for the crypto market until 2022. By 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 them more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Every time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries adopting it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could lead to increasing participation in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the crypto market. As more and more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
vanguard crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses begin accepting crypto as a means of payment, it will make it easier for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long haul Being patient and disciplined is essential.