It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were going downhill after the FTX crash turned things worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. As more and more people learn about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, this makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long run Being patient and disciplined will be key.