It’s been a rough journey for the cryptocurrency market until 2022. By November the market was down by 70% from its previous peak on November 20, 2021. And just when things were going downhill after the FTX crash made them look more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Each time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. 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 in the past, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also 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 companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. In the future, as more 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 market for crypto continues to mature, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, this will make it more convenient for people to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. For those looking to invest for the long run patience and discipline will be key.