It’s been a difficult journey for the cryptocurrency market in 2022. By November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were looking down after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Every time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown 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 before, fall-offs are usually followed by a prolonged bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology. This could 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 such as security and scalability, potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of 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 raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a means of payment, it makes it easier for customers to use and hold crypto, which can increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long haul Being patient and disciplined will be key.