It’s been a rough journey for the cryptocurrency market in 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down, the FTX crash turned things worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could result in increasing participation in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as increased 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 cryptocurrency market. As more and more everyday people are educated about crypto and the best ways 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 continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
nano crypto privacy
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long-term, being patient and disciplined is essential.