It’s been a tough journey for the cryptocurrency market until 2022. By November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was getting worse and down, the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased 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 individual investors, are also starting to participate in the crypto market. With increasing numbers of people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of people are beginning to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can increase prices.
crypto scratch cards
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long haul, being patient and disciplined will be key.