It’s been a rough journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were going downhill, the FTX crash made them look even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. And every time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new high 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
Similar to what we’ve witnessed before, fall-offs are typically followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just 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 the use of crypto is increasing in a variety of ways. This growing demand can lead to more people being involved in the market which could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can increase prices.
how to code a crypto trading bot
Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects to consider, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long run patience and discipline is crucial.