It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. When things were looking down, the FTX crash turned them even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Every time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and lead to greater prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it will make it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined is crucial.