It’s been a difficult journey for the cryptocurrency market through 2022. In November the market had dropped by 70% from its previous peak at the end of November. Just when the market was getting worse, the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Every time, it’s bounced back with a huge rally.
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 record high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in many ways. And this growing use case could lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract 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, has a wide range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be more convenient for people to buy and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher prices for crypto.
More adoption by merchants
As more and more businesses accept cryptocurrency as a method of payment, this makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. For those committed to the long-term, being patient and disciplined is crucial.