It’s been a tough journey for the cryptocurrency market in 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were looking down and down, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This is likely to 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, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are starting to learn about and understand it. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
crypto market structure
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
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 hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. For those committed to the long-term Being patient and disciplined will be key.