It’s been a tough journey for the cryptocurrency market until 2022. By November, the market had dipped by 70 percent from the previous high at the end of November. Just when the market was getting worse, the FTX crash turned them even more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record 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 the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just 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 better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. And this growing use case could result in more people being involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. With increasing numbers of 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 cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers accept cryptocurrency as a method of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. For those committed to the long run patience and discipline is essential.