It’s been a tough journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in 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 more companies and industries embracing it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be 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.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more people learn about crypto and how to invest in it This could result in more demand and higher prices.
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 the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created using blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting to accept crypto as a means 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
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses accept crypto as a means of payment, this makes it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. For those committed to the long run, being patient and disciplined will be key.