It’s been a tough journey for the cryptocurrency market until 2022. By November the market was down by more than 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash turned things more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had 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 previously, dips tend to be followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could result in increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the crypto market. In the future, as more people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for people to buy and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses accept cryptocurrency as a method of payment, it makes it easier for customers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.