It’s been a difficult experience for the crypto market through 2022. In November the market was down by 70% from its previous peak in November 2021. When things were getting worse and down, the FTX crash made them look worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom 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. In 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe 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 technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. As more and more people learn about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses begin accepting crypto as a form of payment, it makes it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market will see a recovery in 2023. For those in it for the long-term patience and discipline is essential.