It’s been a rough journey for the cryptocurrency market in 2022. By November the market had dropped by 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash made them look worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it has bounced back with a big 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 record high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the crypto market. As more and more everyday people become aware of cryptocurrency and investing 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 crypto
As the crypto market grows, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that could drive up prices.
taxes on crypto airdrop
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to utilize and store crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long run, being patient and disciplined will be key.