It’s been a rough journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. Just when the market was looking down after the FTX crash turned things even worse. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. And every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world 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 ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow it will be easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants accept cryptocurrency as a method of payment, this makes it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long-term Being patient and disciplined will be key.