It’s been a rough journey for the cryptocurrency market until 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were looking down, the FTX crash turned things even worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Each time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each 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, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is growing. From finance to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions 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 cryptocurrency market. In the future, as more everyday people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built using blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long-term patience and discipline is crucial.