It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by 70 percent from the previous high at the end of November. Just when the market was going downhill, the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Every time, it’s rebounded by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. 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 increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. In the future, as more everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which can drive up prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency 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 costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for individuals to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a means of payment, this makes it easier for consumers to use and hold crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long run, being patient and disciplined is crucial.