It’s been a rough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was looking down and down, the FTX crash made them look more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows it could result in more people buying and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing 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 higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses accept cryptocurrency as a method of payment, this makes it easier for customers to hold and use crypto, which could increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market will see a recovery in 2023. And for those who are committed to the long run, being patient and disciplined is crucial.