It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash made them look even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. And every time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. 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 previously, dips are usually followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand could result in more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. With increasing numbers of people become aware of 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 grows as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
sen. Warren sanctions compliance crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to explore cryptocurrency as a possible 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 higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants accept cryptocurrency as a method of payment, it will make it easier for customers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long run patience and discipline is essential.