It’s been a difficult experience for the crypto market through 2022. In November, the market had dipped by more than 70% from its previous peak at the end of November. Just when the market was looking down, the FTX crash turned things even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it has bounced back by a massive rally.
In 2013, for instance, 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 the record, and hit a new high of $19,600. In 2018, it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. This growing demand can lead to increasing participation in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are starting using crypto to be a means 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 owned by the state as investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
In the event that more businesses accept cryptocurrency as a method of payment, it will make it more convenient for customers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors to consider, 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-term Being patient and disciplined will be key.