It’s been a tough journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it’s rebounded with a huge rally.
For example, 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 that record and hit a record highest of $19,600. Fast forward to 2018, the price was 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
Just like we’ve seen previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent 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 a myriad of ways. And this growing use case can lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of 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 cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers accept crypto as a means of payment, it will make it more convenient for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined is essential.