It’s been a difficult journey for the cryptocurrency market through 2022. In November the market was down by 70 percent from its previous high at the end of November. And just when things were going downhill after the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke the record and hit a record highest of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in many ways. This growing demand can lead to more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to higher prices.
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. As more and more people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are starting to learn about and appreciate it. As understanding and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which could increase prices.
crypto platform arbix flagged transfers
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for people to buy and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, this will make it more convenient for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will have a rebound by 2023. If you’re in it for the long-term patience and discipline will be key.