It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were looking down, the FTX crash made them look even 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’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had 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
As we’ve seen in the past, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. As more and more people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which could raise prices.
startup wants people using crypto tokens
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to look at crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of 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
The number of ATMs that accept crypto increase it will be more convenient for people to buy and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more merchants start accepting crypto as a means of payment, it will make it easier for customers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could see a recovery in 2023. And for those who are committed to the long run, being patient and disciplined is essential.