It’s been a difficult journey for the cryptocurrency market until 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash turned them even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. And every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. 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
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are looking for safe haven investments like gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. As more and more people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
crypto what is scalping
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow 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 crypto market grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, it makes it easier for people to use and hold 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 likely that the crypto market could be able to see a rebound in 2023. For those in it for the long-term, being patient and disciplined is crucial.