It’s been a rough journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from its previous high at the end of November. When things were getting worse, the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Every time, it’s bounced back with a big rally.
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. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about it and comprehend it. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could drive up prices.
crypto options arbitrage
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase it will be easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, it will make it easier for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long-term Being patient and disciplined will be key.