It’s been a tough journey for the cryptocurrency market in 2022. By November the market had dropped by 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it has bounced back with a big rise.
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. However, in 2017 it broke that record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could result in more people being involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals 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 that accept crypto increase, it will become easier for individuals to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long run, being patient and disciplined will be key.