It’s been a rough journey for the cryptocurrency market in 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill after the FTX crash turned them even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Each time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many 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 industries are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation 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 people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could increase prices.
cum crypto price
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting using crypto to be 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.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. 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.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, it will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. For those committed to the long-term patience and discipline is crucial.