It’s been a tough ride for the crypto market until 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash made them look more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us 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 tend to be followed by a long bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also 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 adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in many ways. And this growing use case could lead to more people getting involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. With increasing numbers of people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be easier for people to buy and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as 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 lead to increased demand and higher rates for the crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long run, being patient and disciplined will be key.