It’s been a tough journey for the cryptocurrency market through 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were looking down, the FTX crash made them look worse. So, will 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’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows 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 typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is 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 one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of 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 market for crypto is maturing, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that could raise prices.
custom crypto exchange
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a means of payment, it will make it easier for people to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul patience and discipline will be key.