It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market was down by 70 percent from the previous high at the end of November. Just when the market was going downhill and down, the FTX crash made them look more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has 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 gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could lead to more people getting involved in the crypto market which 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 and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors, 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 an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase it will be more convenient for people to buy and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept cryptocurrency as a method of payment, this will make it easier for consumers to hold and use crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market will have a rebound by 2023. For those in it for the long run patience and discipline will be key.