It’s been a rough journey for the cryptocurrency market until 2022. By November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were looking down, the FTX crash made them look even more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could result in increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses accept crypto as a means of payment, it makes it easier for consumers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is crucial.