It’s been a rough experience for the crypto market until 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash made them look worse. 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. Each time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each 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 lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
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 taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people being involved in the market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm 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 security and scalability, potential of crypto assets will expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain it could result in increased 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 crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are starting to show interest in crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for people to buy and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, this makes it easier for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline will be key.