It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from its previous high in November 2021. And just when things were looking down, the FTX crash made them look even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto 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 noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. In the future, as more 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 crypto market is maturing as more and more people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that can increase prices.
crypto software development
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to explore crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept crypto as a form of payment, this makes it easier for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long-term, being patient and disciplined is crucial.