It’s been a tough journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. And just when things were going downhill, the FTX crash made them look worse. So, will 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. Each time, it’s rebounded by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement 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 increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people are educated about crypto and the best ways to invest 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 continues to mature, more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto 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.
With the amount of ATMs for crypto increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for customers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline will be key.