It’s been a difficult journey for the cryptocurrency market through 2022. In November the market was down by more than 70 percent from the previous high in November 2021. And just when things were getting worse and down, the FTX crash made them look worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. This growing demand could result in increasing participation in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous 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 could lead to greater prices.
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of 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, which could increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it this could result in increased 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 beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a form 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 state-owned investments, are beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased 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 consumers to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, it will make it more convenient for customers to hold and use crypto, which could drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined is essential.