It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were going downhill after the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. And every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 in the past, dips are typically followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than 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 taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to higher prices.
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
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 and more industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting using crypto to be a means 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
These funds are government-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be more convenient for individuals to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a form of payment, this will make it easier for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those in it for the long run Being patient and disciplined is essential.