It’s been a tough journey for the cryptocurrency market until 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were looking down after the FTX crash turned things more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries taking to it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could result in more people being involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore 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 crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad 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. This could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could increase prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built using blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, it will make it more convenient for customers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long-term patience and discipline will be key.