It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Government regulations
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term Being patient and disciplined is crucial.