It’s been a tough journey for the cryptocurrency market through 2022. By November the market was down by 70 percent from its previous high on November 20, 2021. When things were looking down and down, the FTX crash made them look even worse. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies 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 result in more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and could lead to higher prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting cryptocurrency as a method of payment, it makes it easier for people to utilize and store crypto, which can drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is crucial.