It’s been a difficult journey for the cryptocurrency market through 2022. By November the market had dropped by 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash turned things even worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and lead to greater prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are starting to create 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 underlies many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to learn about and understand the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
dss crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses begin accepting crypto as a form of payment, this makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long run, being patient and disciplined will be key.