It’s been a tough journey for the cryptocurrency market through 2022. In November the market was down by more than 70% from its previous peak at the end of November. And just when things were looking down after the FTX crash made them look more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. And 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
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people become aware of crypto and the best ways to invest 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 as more and more people are beginning to learn about and understand the concept. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be easier for people to buy and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses accept crypto as a means of payment, this makes it easier for customers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long-term Being patient and disciplined will be key.