It’s been a difficult journey for the cryptocurrency market through 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was looking down after the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people being involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains 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 cryptocurrency. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more people are educated about crypto and how to invest 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 learn about it and comprehend it. As the awareness and acceptance grows of crypto, it will lead to 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, which allows financial services to be created upon blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to show interest in crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a means of payment, this will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.