It’s been a rough journey for the cryptocurrency market through 2022. As of November the market was down by more than 70% from its previous peak in November 2021. Just when the market was getting worse, the FTX crash turned them even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it’s rebounded by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries taking to it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could lead to more people getting involved in the market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
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 crypto assets will continue to expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi expands and more platforms and projects 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 continues to grow as more and more businesses are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more merchants begin accepting crypto as a form of payment, this makes it easier for consumers to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long run, being patient and disciplined is essential.