It’s been a tough journey for the cryptocurrency market through 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. When things were going downhill and down, the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had 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 overcomes the resistance set 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
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. And this growing use case could result in more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as 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 increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more 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 cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could raise prices.
crypto audit companies
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market 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 use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long haul, being patient and disciplined will be key.