It’s been a tough ride for the crypto market until 2022. By November the market had dropped by 70% from its previous peak in November 2021. And just when things were getting worse and down, the FTX crash turned them even worse. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in many ways. And this growing use case could result in increasing participation in the market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help 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 offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency 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 caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as 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 individual investors, are also starting to participate in the crypto market. In the future, as more people learn about cryptocurrency and investing in it, this could lead to 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 increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
air crypto price
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing 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 everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for people to buy and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this makes it easier for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long run Being patient and disciplined will be key.