It’s been a tough journey for the cryptocurrency market in 2022. In November the market had dropped by 70 percent from its previous high in November 2021. And just when things were getting worse, 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 cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also 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 embracing the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could result in increasing participation in the market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that could increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be created 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.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that 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, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, this will make it easier for consumers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long-term, being patient and disciplined is essential.