It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned things even worse. What is the likelihood that 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 has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern can be seen not only in 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 more businesses and industries taking to 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 being involved in the market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are starting to learn about and understand it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long haul Being patient and disciplined is crucial.