It’s been a rough journey for the cryptocurrency market until 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, the FTX crash turned them even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand can lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people are educated about crypto and how to invest 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 cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects 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 grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this will make it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long run Being patient and disciplined will be key.