It’s been a rough journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. Just when the market was going downhill, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it has bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in greater prices.
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance grows of crypto, this could lead to more people buying and holding crypto, which could drive up prices.
time crypto token
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a means of payment. This could result in increased 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 investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major 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 crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more businesses start accepting cryptocurrency as a method of payment, it will make it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is essential.