It’s been a tough journey for the cryptocurrency market through 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash turned things more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. And every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in many ways. This growing demand can lead to more people getting involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing, more and more people are beginning to learn about and understand it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long-term, being patient and disciplined is essential.