It’s been a rough experience for the crypto market until 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were going downhill and down, the FTX crash turned them even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations 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.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a means of payment, this will make it more convenient for consumers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.