It’s been a rough ride for the crypto market through 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was looking down and down, the FTX crash turned them more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Each time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people getting involved in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world 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 technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of people are educated about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about and appreciate it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
defi11 crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow it will be easier for individuals to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses accept crypto as a means of payment, this makes it easier for customers to use and hold crypto, which could boost demand and increase 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 have a rebound by 2023. And for those who are committed to the long run patience and discipline is essential.