It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by more than 70 percent from its previous high on November 20, 2021. When things were getting worse and down, the FTX crash turned things even more dire. 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 many dips in the past. And every time, it has bounced back with a huge 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. In 2017 it broke that record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve had 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
Just like we’ve seen previously, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
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 market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to learn about and understand the concept. As awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
crypto unit price
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, this will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long-term patience and discipline will be key.