It’s been a rough journey for the cryptocurrency market through 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. And just when things were getting worse and down, the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. And every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that after 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 prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could result in more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which could increase prices.
crypto market making software
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to look at crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long run Being patient and disciplined will be key.