It’s been a difficult journey for the cryptocurrency market in 2022. In November the market had dropped by 70% from its previous peak at the end of November. Just when the market was getting worse, the FTX crash made them look worse. The question is, can the crypto market be able to recover by 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 rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance grows of crypto, this could lead to more people buying and holding crypto, which can increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency 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 increase it will be more convenient for consumers to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a form of payment, it will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long haul Being patient and disciplined is crucial.