It’s been a difficult journey for the cryptocurrency market in 2022. By November the market was down by more than 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash turned things worse. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Each time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that can raise prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, 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.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market could have a rebound by 2023. And for those who are committed to the long run patience and discipline will be key.