It’s been a tough journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm 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 like scalability and security, the potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could raise prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services built using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul patience and discipline is essential.