It’s been a rough journey for the cryptocurrency market until 2022. In November the market was down by more than 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Each time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
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 adopting it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand can lead to more people getting involved in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is 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 brought on through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. For those in it for the long-term, being patient and disciplined is crucial.