It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. When things were going downhill, the FTX crash turned them worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen 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 before, fall-offs are usually followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, 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 utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology 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 grow. This could lead to more acceptance 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 starting to look for safe haven assets like bitcoin and even gold. 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 ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. In the future, as more everyday people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to explore crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses begin accepting crypto as a form of payment, it will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is crucial.