It’s been a tough journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash turned things 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 had its fair share of drops in the past. Every time, it has bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. And 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
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern 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 more companies and industries adopting it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to learn about and understand it. As awareness and acceptance of crypto grows, it will lead to more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to look at crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be easier for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, this will make it easier for people to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined will be key.