It’s been a tough journey for the cryptocurrency market until 2022. By November the market was down by 70 percent from its previous high in November 2021. And just when things were looking down, the FTX crash turned them even more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are starting to learn about and understand it. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the 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 instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be easier for individuals to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
As more and more merchants accept crypto as a form of payment, this will make it more convenient for consumers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long run Being patient and disciplined is essential.