It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by 70% from its previous peak at the end of November. Just when the market was going downhill after the FTX crash turned them more dire. The question is, can the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. As more and more everyday people become aware of crypto and the best ways 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 is maturing as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
wrapped centrifuge crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
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 demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of 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 issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a form of payment, this makes it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long run patience and discipline will be key.