It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by 70% from its previous peak in November 2021. Just when the market was getting worse after the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. Every time, it has bounced back with a big rally.
For example, 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, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that following 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 that finally breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are beginning to learn about and understand it. As awareness and acceptance grows of crypto it could result in more people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting crypto as a form of payment, this makes it easier for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long haul patience and discipline is essential.